Posts by Rod David
The First Trade… No excuses.
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…
The most bullish aspect to Thursday’s session was that it didn’t extend Wednesday’s negative FOMC reaction. Similarly, the most bearish aspect to Thursday’s session was that it fully retraced the negative reaction. FOMC news had been greeted at 1901.00-1904.00, and its knee-jerk reaction up was reversed down sharply to 1965.00. Rallying overnight enabled Thursday’s opening surge to touch 1902.50. Reacting down to 1966.00 was recovered enough for the afternoon to repeatedly test 1892.00 resistance.
Overnight action’s new info…
Having been inhibited through the afternoon, reaction to AMZN’s post-close earnings miss easily held the afternoon’s 1877.00 low. Surging before midnight pierced Thursday morning’s low up to 1993.25. Its reaction down to 1880.00 was recovered entirely into Europe’s opens, hovering since then just under the highs and supported by the 1893.50 bias-up signal.
If, then…
The 1913.00 potential remains outstanding, and the open is in proximity of fulfilling it quickly. Trending up overnight and well above yesterday’s lows makes fresh highs seem like the product of momentum, but actually it’s a probe above the range’s upper-end. And a lot of momentum has been expended just to get here, so extending into a breakout is difficult. So, fresh highs will be vulnerable to reversing back down, whether upon exiting the open or exiting the morning’s bias environment. Outlasting those windows could at least marginalize sellers for the day, and possibly extend up to 1924.00. Rejecting fresh highs — especially after testing 1913.00 — could extend back down under yesterday’s lows. Downside risk to NOT probing higher high at the open should be moot so long as bias-up is triggered.
First Trade…
Exiting the open at 9:45 under 1887.50 would be unlikely to trigger the 1893.50 bias-up signal at 10:15. Exiting the open above 1901.00 would be likely also to exceed the 1898.50 bias-up target at 10:30 to renew the bias-up signal.
Post-market Wrap (recording & summary)
Perhaps Thursday afternoon was paralyzed by anxiousness ahead of AMZN’s post-close earnings. The range formed an Ascending triangle between 1878.00-1892.00. The range’s lower-end was attacked suddenly after the cash session close when AMZN announced a big miss that pummeled its stock.
All of which would be bullish. Broader markets don’t react durably to an individual stock. Thursday afternoon’s selling pressure has already been expended in inhibiting higher highs. Less was available to react any deeper on the actual news.
So, potential remains alive for probing above Wednesday’s highs to test 1910.00 — alive, if not necessarily in-play, and if vulnerable to reacting down sharply when that test is done. Probing lower first, anyway, would still have a recovery path available.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1900.50 | 1893.50 |
| …would target | 1905.25 | 1898.50 |
| Bias-down: under | 1887.25 | 1880.50 |
| …would target | 1881.75 | 1874.75 |
| 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.
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))
Thursday’s firm open initially exploited Wednesday’s constructive session, which had recovered the open’s gap up after filling the gap below back to Tuesday’s close. Closing above 1.0950 would confirm fresh highs are in-play.
Gold Feb Contract (GC, ETF: (GLD))
Initial strength Thursday was reversed down sharply to retest the 1114.00 pullback limit, which held to maintain the potential for extending higher to 1131.50.
Silver Mar Contract (SI, ETF: (SLV))
Spiking down Thursday morning held 14.20 support to prevent reversing the trend back down, but 14.40 must still be recovered to resume the rally.
30-year Treasury Mar Contract (US, ETF: (TLT))
Testing 160-20 resistance overnight didn’t extend higher intraday, but neither was it reversed down as potential remains alive for resuming or at least extending the rally to 162-28.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Dueling headlines between Russia and Opec members triggered early volatility Thursday, which eventually resolved up to test the 34.80 corrective bounce target by 2 cents. Its reaction down held the 32.50 pullback limit that keeps alive potential for extending to 37.20.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was not greeted from a position of strength. But its knee-jerk reaction down was recovered to attack positive territory, and closing above 2.14 keeps alive the basing pattern and its potential for launching a new upleg.
Mid-day Update… Still running circles.
Narrowing into late-afternoon.
This afternoon’s 1987.50 bias-up signal was probed during the noon hour up to 1992.00 resistance. Reacting down to 1878.00 avoided triggering bias-up. This is a no-bias environment.
A bounce back to 1987.50 has held. A brief reaction down is now trying recovering. Extending higher would be credible when the bias environment comes within view of lapsing at 2:15-2:20.
Exiting the bias environment in rally mode would target a probe above yesterday’s 1910.00 high to test 1913.00. That leg should be relentless, but not necessarily steep. Otherwise, not rallying out of the bias environment would be vulnerable to probing back into negative territory.