Posts by Rod David
The First Trade… Higher highs retraced again.
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…
Invalidating the traction gained by Monday’s sellers required at least gapping up Tuesday to 1943.00, but then also extending higher from there. Tuesday’s gap up to 1943.00 first reacted down to attack 1938.00. But the delay was compensated by quickly rallying back to Monday’s 1956.00 high. That made Friday’s 1968.75 pre-open high retest likely, and its 1971.00 target was met during the afternoon bias environment. Resuming the rally extended it up to 1975.50 at the cash session close.
Overnight action’s new info…
Futures had extended already to 1978.50. Its extension up to 1984.50 was retraced into and out of Europe’s opens, back to and through yesterday’s cash session close. Now 1971.00 is being attacked as support. Meanwhile, there was enough complexity to the overnight extension to consider it a “new Globex trend extreme” that requires intraday retest.
If, then…
The 1971.00 target of retesting Friday’s pre-open high has not yet broken higher. Its initial test yesterday afternoon reacted down, the subsequent higher high at 1975.50 reacted down to 1971.00, and its recovery made no higher high before the cash session close. Only futures have probed higher — and despite probing substantially higher, 1971.00 has attracted price back down to it again. Since buyers didn’t gain traction yesterday, extending the rally requires gapping up. A more subtle beginning to retesting the overnight highs would be vulnerable to reversing down hard this afternoon.
First Trade…
Exiting the open at 9:45 above 1979.25 would be likely to trigger the 1977.00 bias-up signal at 10:15. Exiting the open under 1971.00 would be unlikely to trigger bias-up.
Post-market Wrap (recording & summary)
Retesting Friday’s 1968.75 pre-open high had targeted 1971.00. Its test held initially, but was probed eventually by 7 points up to 1975.75. That’s a good example of thoroughly testing a target. Reacting down probed under 1971.00 by 1 point. That’s the definition of an attractive target.
Surging into the cash session close attacked the 1975.50 high. Surging into the futures close to touch 1978.50 only reflects a short-squeeze. The original probe above 1971.00 has yet to be exceeded when it matters.
Having trended up into the close, gapping down under the bias environment’s 1966.50 low could form a “session long decline” setup which hasn’t been seen in awhile. And with every leg still overlapping 1971.00, no “unfinished business above” would be left outstanding.
Being vulnerable to reversing down is not a requirement. Not trending back down Wednesday would next target 1993.00, and potentially 2012.00-2014.00.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1979.50 | 1977.00 |
| …would target | 1985.00 | 1982.50 |
| Bias-down: under | 1968.50 | 1966.00 |
| …would target | 1963.00 | 1960.50 |
| Signal status: NO-BIAS | 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.
Pre-close View… Eyes closed, full ahead.
Powering through the point of vulnerability.
Retesting Friday’s 1968.75 pre-open high had targeted 1971.00 (+/-, probably +). It was pierced by 2 ticks. Then the retest would become vulnerable to reversing down.
But price only reacted temporarily, attacking this afternoon’s 1966.00 bias-up signal as support. Rather than extend down further, a recovery has probed fresh highs attacking 1976.00.
The rally didn’t gain traction for the effort. The bias environment began lapsing within the noon hour’s range to avoid gaining traction. Despite entering the final hour above the bias environment’s high, the 3:10-3:20 window did not confirm.
None of which is a sell signal. Back under 1970.50 is a sell signal. Its targets all lie under Friday’s highs — at least under Friday’s pre-open 1968.75 high and the post-open 1961.00 high, if not also much lower.
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))
Monday night’s test of 1.0865 support was recovered, as was Tuesday morning’s lower low, which continues suggesting that a bounce targeting 1.1050 may be forming.
Gold Apr Contract (GC, ETF: (GLD))
Testing 1248.00 up to 1251.00 Tuesday was reversed down sharply to retest the 1227.50 buy signal. A second consecutive higher close above 1242.00 would have targeted a retest of prior highs up to 1265.00. Closing back above 1242.00 again would still be credible for extending higher.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s initial strength held at the 15.15 buy signal, and reversed down in reaction to the morning’s econ reports, still needing a close above to target 15.70.
30-year Treasury Jun Contract (US, ETF: (TLT))
Failing to gap up for a second consecutive session gave Friday’s gap down more credibility for extending lower to retest the prior week’s 163-14 low, and it was probed down to 162-04. Bounces must recover above 163-00 to suggest the decline is ended.
Closing back above 163-14 would signal the decline’s momentum had lapsed. Closing above 163-24 would signal another rally leg is underway.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Retesting Friday’s ~34.65 high didn’t extend, but it wasn’t probed to justify raising the sell signal up from 32.50.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Not gapping up prevented exploiting one bullish setup, but a late surge opened another that must still close above 1.80 to signal momentum reversing up.