Posts by Rod David
The First Trade… Out of the frying pan.
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…
Already retracing Monday’s late rally before Tuesday’s close, the attraction below had been neutralized. It was a pretty big rally, and so a big retracement. And there were many other big rallies and retracements throughout the day. The last rally was big, and gained a little traction, but it was retraced just enough to close back within the day’s wide range — leaving overbought RSIs outstanding at its 1863.75 high.
Overnight action’s new info…
Room for extending the Tuesday’s late pullback to 1840.00 was exploited down to 1838,50. Twice. Already rallying into Europe’s opens, only a blip-down had to be absorbed before surging to 1870.50. the surge is being consolidated back down to 1864.50
If, then…
The next higher objective put into play yesterday afternoon was a test of Friday afternoon’s 1868.00 “higher prior lows.” Done. The only challenge now is the same challenge as at yesterday’s open — already having fulfilled its upside attraction. The gap back to Friday’s 1873.25 and 1875,50 closes could be filled, too. It’s not required, but the potential may be enough to encourage extending the rally to test 1881.00 and 1888.00. Fed Chair Yellen’s congressional testimony may also be a challenge, or an accomplice.
First Trade…
Exiting the open at 9:45 back under 1856.50 would be unlikely to exceed the 1861.25 bias-up target at 10:15. Bias signals are otherwise well out of range currently.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1861.25 | 1855.50 |
| …would target | 1867.00 | 1861.25 |
| Bias-down: under | 1845.50 | 1840.00 |
| …would target | 1838.50 | 1833.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
Attacking either end of the range again was likely to probe beyond it. The range’s upper-end was the lucky recipient of that attention, Its 1856.50 highs were broken on the way up to attacking 1864.00.
Lest that sound the decline’s all-clear, a late reaction down attacked 1844.00. Tuesday’s super-volatile session was super volatile into its last 20-point drop.
Gapping up Wednesday above Tuesday’s late high would target Friday’s higher prior lows around 1868.00, and probably higher to also test 1888.00. Otherwise, opening under 1840.00 could find the decline having resumed before Fed Chair Yellen clears her throat during her congressional testimony.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Already extending higher Monday night to gap up Tuesday put the session on-track to fulfill the required eventual third higher close from Wednesday’s confirmed breakout. A pullback has room below to test “lower prior highs” at 1.1230 without reversing momentum down.
Gold Feb Contract (GC, ETF: (GLD))
Reacting down from just below the rally’s 1203.00 target didn’t get very far before trending back up into Tuesday’s open. The intraday action ranged narrowly sideways.
Silver Mar Contract (SI, ETF: (SLV))
Testing the rally’s 15.45 target Monday didn’t extend any higher overnight. Ranging sideways through the day kept alive potential for probing higher, but makes higher highs more vulnerable to reacting down sharplyl.
30-year Treasury Mar Contract (US, ETF: (TLT))
Having blown through the rally’s original 162-24 target last week up to 164-07, and then probing that Monday up to 166-01, extending sharply higher Monday night to 167-09 isn’t terribly shocking. Or shouldn’t be. But the rally’s relentlessness is nonetheless impressive, as it repeatedly holds pullback limits, which is now 165-08/165-12. Under 164-28 would start to signal momentum reversing down.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Failing to hold the new 29.55 pullback limit Monday night broke lower Tuesday morning and extended down sharply into the afternoon to 27.75. Fresh lows under 27.56 are targeting 26.40, with room for noise around that down to 25.65.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Dipping Monday night to test 2.06 support rallied Tuesday morning to 2.13. But the balance of the session settled back down to the 2.10 pullback limit.
Mid-day Update… Wide open spaces (Also: Programming Note)
Bias-down target met, held, and reacted.
[This morning’s pre-market Tour recording file was incorrect. I had updated its link in the blog post and sent a follow-up post which I’m hearing some did not receive. If you’re among them and interested, then here is the Tour.]
THE POST-MARKET WRAP WILL BEGIN 15 MINUTES BEFORE THE CLOSE AT 3:45 ET.
Reacting down from this morning’s test of the 1856.50 bias-up target fell all the way to the 1834.50 bias-down target. Its recovering into the bias environment exit tested 1851.00.
Not volatile enough? Sliding from there into and out of the noon hour triggered the afternoon’s 1834.50 bias-down target and met its 1829.25 bias-down target (to within 1 tick). And despite this still being a bias-down environment, probing above its bias-down signal just touched 1848.00.
As suspected this morning, today’s market has no interest in sitting still, and it has a wide range to do it. But it is not trending. It is neither extending yesterday’s decline nor is it reversing up.
One theory being mentioned in the chaRTroom is Yellen’s congressional testimony tomorrow. Regardless, the bias environment is now within view of lapsing 10-15 minutes from now. Extending to either end of today’s range would have a better chance at trending through it.