Posts by Rod David
The First Trade & Pre-open Tour Recording… Greeting the New Year down.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Sunday night’s gap up to 2505.50 was only a 61.8% retracement back to Friday’s late high, suggesting its buyers weren’t strong-handed. Firming overnight up to 2512.50 held within the retracement’s range for noise to suggest nothing different. And Monday’s open overlapped the morning’s open and 2504.50 bias-up target through the first 3 15-minute checkpoints to suggest that trending wasn’t likely. In fact, the session ultimately went only in circles, choppily fluctuating between Friday’s close below down to 2482.75, and the overnight highs above. The close was overlapping the 2505.50 retracement open, confirming that buyers weren’t strong-handed.
Overnight action’s new info…
Monday’s final minutes had dipped to 2488.00. Wild year-end mark-to-market volatility had triggered a 25-point surge snapped back up to through the close to touch 2513.00. Tuesday night’s open surged again to probe Monday’s highs up to 2521.25. By midnight, that had been reversed back under Monday’s lows down to 2479.00. Sliding sharply through Europe’s opens extended to 2452.25. Its reaction consolidated up to 2471.00, and then broke higher to 2478.00.
If, then… (notes to accompany the Tour recording)
If the for any higher high remains alive, then it’s likely to be by a wide margin, and not only to probe a fresh high. Meanwhile, the scenario for already having ended the temporary corrective bear market bounce seems unwilling to wait any longer. Its potential was discussed throughout Monday, with vulnerability to a year-end drop as everyone realizes the bounce into Thursday’s highs was the product of big money having front-run each other already. And if the timing were delayed, then its likely appearance would come earlier today rather than later — and the potential for first probing fresh highs is no longer part of the template. So, already reversing down shouldn’t find much more interim strength than to test Friday-Tuesday “higher prior lows” as resistance before extending down. Otherwise, any more strength through the open that isolates the overnight dip would suggest that the dip was being absorbed by a bigger rally.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2477.00 would be unlikely to recover the 2483.25 bias-down target through 10:15 to renew the bias-down signal. Exiting the open under 2490.75 would be likely at least to trigger the 2493.00 bias-down signal at 10:15.
Look ahead: Economic Calendar – for Wed Jan 2, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar seems very light for a holiday-shortened week, but the remainder of the week will compensate. Meanwhile, the post-open report has a track record for influencing price action.
Redbook
8:55 AM ET
*PMI Manufacturing Index
9:45 AM ET
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2509.00 | 2509.50 |
| …would target | 2517.50 | 2518.00 |
| Bias-down: under | 2492.75 | 2493.00 |
| …would target | 2483.00 | 2483.25 |
| Signal status: LATE BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Sunday night’s gap up to 2505.50 had already suggested buyers weren’t strong-handed, because it had held a 61.8% retracement back to Friday’s late high. Firming overnight up to 2512.50 held within the range for noise to suggest nothing different. And Monday’s open overlapped the morning’s 2504.50 bias-up target through the first 3 15-minute checkpoints to suggest that trending wasn’t likely.
None of which prevented dropping down to 2482.75, not even the triggered 2495.50 bias-up signal. It’s not trending, if it’s contained entirely within a prior leg — in this case, Friday afternoon’s last downleg. The drop was retraced to within 2 ticks of the open’s 2510.00 high, still being only noise within the range, albeit a sizeable range.
That bounce failed, too, retesting the already-filled gap back to Friday’s close at 2487.00. But the balance of the session only bounced choppily back to Sunday night and Monday’s 2505.05 opens, still reflecting weak-handed sponsorship… Until the final minutes, which dipped to 2488.00 and snapped back up to 2513.00, still ending the day at Sunday night and Monday’s opens.
Details and other markets coverage are discussed in the post-market Wrap recording here.
HAVE A SAFE AND HAPPY NEW YEAR’S! CHARTROOM WILL RE-OPEN AT 6:00 ET.
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 testing the 1.1500 buy signal Monday instead of extending higher doesn’t qualify as triggering it. But it also doesn’t reject the test, keeping it alive and credible for any new firming to extend higher intraday.
Gold Feb Contract (GC, ETF: (GLD))
Another overnight probe of fresh highs retested the 1284.00 target that had been met already before Friday’s open, but not tested intraday. Monday also isolated its test of 1284.00 to the overnight. Still not rejecting the target’s test(s) suggests the rally intends to extend higher, next targeting 1319.50.
Silver Mar Contract (SI, ETF: (SLV))
Fresh highs Sunday night weren’t rejected Monday, regardless of Friday already having fulfilled the confirmed breakout’s minimum requirement for at least an eventual third higher close.
30-year Treasury Mar Contract (US, ETF: (TLT))
Finally breaking higher Monday morning is trying to resume the 145-08 buy signal that was first probed Thursday. Already extending to 146-09, It gets every benefit of the doubt for launching a new upleg, so long as pullbacks now hold 145-08 as support.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Greeting the new week already trying to firm back to the 47.00 buy signal is less optimal than first completing a pullback to 43.35-44.15. The recovery attempt failed, still likelier to complete the pullback first.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Despite already fulfilling the decline’s 3.26 target last week, and retesting it into the weekend, Sunday night’s open gapped down and extended to fresh lows. A bottoming pattern remains likely..