Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1940.50 | 1933.50 |
| …would target | 1946.00 | 1939.00 |
| Bias-down: under | 1933.50 | 1926.50 |
| …would target | 1928.50 | 1921.50 |
| Signal status: LATE NO-BIAS, BOTH BIAS-UP PARAMETERS TESTED | 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)
Tuesday afternoon’s short-squeeze setup wasn’t exploited immediately. But it was exploited thoroughly. Fresh lows testing 1907.00-1912.00 support were isolated to the bias environment, and the final hour was entered above the ~1919.50 bias environment highs. But it was the 3:10-3:20 window that surged.
The 3:10-3:20 window surging to fresh highs also confirmed the traction gained by entering the final hour above the bias environment’s high. Although vulnerable to inverting down, Wednesday morning is due to reward Tuesday’s rally for having gained traction.
Inverting down must be signaled. But the signal is made possible by Tuesday afternoon’s rally having met and held resistance at 1933.50. A catalyst has already appeared, with Iran capturing US sailors.The reaction down is already testing 1922.00.
Rejecting the short-squeeze’s recovery would put into play a retest of the lows down to 1881.00-1885.00. There’s no bearish reason to probe any higher first, which would next target 1948.00, potentially also 1975.00 and 1985.00.
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… Squeeze played.
The setup is there, but not yet triggered.
1912.00 support had room below it down to 1907.00. The afternoon’s bias environment tested that room and retested it, while RSIs diverged positively. The bias environment’s exit recovered 1912.00.
Extending up to 1924.00 entered the final hour above the afternoon’s prior highs. That’s the stuff of a short-squeeze.
Not that a squeeze is required. But the market doesn’t become more vulnerable than this. Rejecting fresh lows back above prior highs is not noise — specifically during these two timing windows, and especially after having expended so much selling pressure.
Not exploiting the setup could become as bearish as it would have been bullish. And a squeeze could be very bullish.
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))
Gapping down Tuesday may be fulfilling the likely retest of 1.0750-1.0785, the original pullback target, which is likelier to break lower given the chance.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s shallow brief pullback wasn’t able to fulfill the rally’s pullback, but Monday’s narrow ranging didn’t either, so Tuesday’s open gapped down into to the 1084.00 lower-end of last Wednesday’s range. Any lower would reverse the trend down, but closing above 1098.00 would resume the rally..
Silver Mar Contract (SI, ETF: (SLV))
Gapping down Tuesday ranged around 13.77 support, not extending down intraday, but also not rejecting it, which makes fresh lows under 13.65 likely. A recovery attempt would be credible only if closing above 14.10.
30-year Treasury Mar Contract (US, ETF: (TLT))
Despite gapping down Tuesday to test 155-00, a reversal up to 157-18 retested the 156-30/157-04 objective that had held Sunday night and which still required an intraday retest. So long as 157-04 holds as support, the next higher resistance is 157-22 and 158-10, but no requirement to test either.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Tuesday and extending higher to test 32.20 was attracted back down to fill its gap back to Monday’s close under 31.45, but extended down sharply to probe under overnight lows and test 30.00. Closing back above 31.35 is the minimum requirement to signal the decline is ending.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Tuesday’s open gapped down for a second consecutive session to 2.33 and extended down intraday to 2.27. Any lower would next visit 2.14, but otherwise the gap back to Monday’s 2.40 close should attract price higher.
Mid-day Update… Optimism primed.
Afternoon digestion.
The post-open rally to 1940.00 has reversed down considerably. Not only in terms of size for dropping 31 points down to 1909.00, but also in relative terms for dipping well back into yesterday’s range.
Neither of those measurements disqualifies the drop from being only a temporary correction.
Room down to 1912.00 has held through every relevant timing window. Its support was tested as long as possible, and then longer, triggering noN-bias for this afternoon’s bias environment.
This morning’s noN-bias environment wasn’t likely to sit still since it was triggered from so far above. This afternoon’s noN-bias environment should be more subdued — still choppy, but ranging around 1912.00 instead of trending away from it.
When the bias environment is within view of lapsing, trending either way would be credible for extending in that direction.