Posts by Rod David
The First Trade… All action, no traction
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Not gapping up Wednesday prevented trending up immediately. But it didn’t default to a sell-off. Choppy trading did poke lower intraday, but didn’t extend down, while waiting for the afternoon’s bias environment to lapse. The balance of the session trended up to touch the 1984.75 overnight high’s “new Globex trend extreme” before the close.
Overnight action’s new info…
Initially pulling back to 1978.50 was recovered to higher and higher highs that eventually attacked 1988.00. Its reaction back down to 1978.50 had largely recovered before reacting down again under yesterday’s 1984.50 cash session close. Meanwhile, continually overlapping yesterday’s session has avoided creating another “new Globex trend extreme” which would have required intraday retest.
If, then…
Overnight choppiness around yesterday’s highs is another sign of waning upside momentum. Whether that’s potentially bearish, or even eventually bearish, it’s not necessarily immediately bearish. Beginning yesterday’s session with a similar challenge only delayed its later improvement. Today’s version of that challenge could still probe higher, perhaps earlier and only temporarily.
First Trade…
Exiting the open at 9:45 above 1987.25 would be likely to trigger the 1986.00 bias-up signal at 10:15. Exiting the open under 1979.75 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1988.25 | 1986.00 |
| …would target | 1994.00 | 1992.00 |
| Bias-down: under | 1977.50 | 1975.50 |
| …would target | 1971.25 | 1969.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-market Wrap (recording & summary)
Buyers didn’t gain traction for their effort Wednesday, since the final hour’s entry and the 3:10-3:20 window didn’t trend up. But they were rewarded anyway by later trending up to fresh post open highs at 1984.75.
That neutralized the attraction to the overnight high’s “new Globex trend extreme” 1 tick lower. It required being retested intraday, often the same day (although not necessarily).
Leaving the upside attraction outstanding could have preserved the rally’s momentum in case Wednesday had pulled back. Neutralizing its attraction earlier in the day would have been vulnerable to reacting down durably. But waiting until the session’s last minutes also meant closing above prior highs — that enables recovering from an overnight dip since the gap back to Wednesday’s close will want to be filled.
Other durable paths down are possible, but only post-open, and only after probing a fresh high. Otherwise, Thursday is vulnerable either to backing-and filling again (which is less likely because of it might duplicate the prior session’s pattern), or to gapping up and extending to test the 1993.00 area.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… No go.
Sellers absorbed, but not spit back out.
The bias environment began lapsing 2-3 ticks above the noon hour’s high, while a rally leg was already underway, which extended much higher. I’ll give that setup a benefit of the doubt for gaining traction… IF it can confirm.
But despite an interim probe higher, the final hour’s entry was still overlapping the bias environment’s high. And despite recovering back to the session high, the 3:10-3:20 window didn’t extend higher. So, no confirmation.
Probing fresh highs up to 1981.00 is now reacting down 4 points. Its dip can be shallow or deep, but probably not temporary — recovering before the close is unlikely. Ranging sideways at the highs without trending back down does make fresh highs likely eventually.
Daily Spot…
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Mar Contract (EC, ETF: (FXE, UUP))
Still fluctuating Wednesday around the decline’s 1.0865 likely support, with potential for closing back above 1.0900 to target at least a corrective bounce to 1.1050.
Gold Apr Contract (GC, ETF: (GLD))
Bouncing Wednesday back to 1242.00 neither rejected it nor closed above it, so there’s still room up to 1249.00 before signaling a retest of prior highs up to 1265.00.
Silver May Contract (SI, ETF: (SLV))
Firming Wednesday recovered back up to Tuesday morning’s highs, still needing to recover 15.15 to target 15.70.
30-year Treasury Jun Contract (US, ETF: (TLT))
Ranging narrowly Wednesday around 162-14 didn’t extend Tuesday’s drop to confirm it, but recovering 163-14 would still signal the decline had ended, and back above 163-24 would reverse momentum back up.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fluctuating wildly around unchanged Wednesday did probe a fresh high that allows raising the sell signal 50 cents to 33.00. That doesn’t prevent breaking higher from the Symmetrical Triangle pattern that has formed, but the likelier resolution is still down.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Tuesday’s late surge that never extended higher was retraced entirely overnight, but no changes were made to the pattern that would still trigger a rally above 1.80.