Posts by Rod David
Post-open Review… Slowing it down.
Opening range struggles to hold yesterday’s high.
Overnight action was comprised of two uplegs and their interim reactions down. Each reaction down has probed back under yesterday’s high. None of which would prevent extending the rally, or resuming it since the rally has yet to extend. But the open did fail to trigger bias-up.
Now an offsetting test of the 2481.75 bias-down signal is in-play, having held a test of the 2502.75 bias-up signal through 10:15. That’s the bias requirement, and already fresh post-open lows are testing 2487.75.
Structurally, no further downside is required before trying to resume the rally. Back above 2503.75 would trigger a retest of the 2519.25 overnight high, probably up to 2525.25. All being doomed to failure for having originated from so low, so late.
Meanwhile, a test of the 2481.75 bias-down signal wouldn’t be required to hold. This being a Friday, any suggestion that the rally won’t resume today could be the catalyst to attract significant selling pressures. A much deeper reversal would become possible.
The First Trade & Pre-open Tour Recording… Nearing the next target, on a Friday.
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…
Wednesday’s record-setting rally pulled back overnight, but not until after probing a fresh high up to 2481.50. Its reaction down to 2422.50 greeted Thursday’s open during a bounce up to 2445.00. The morning’s lower low at 2412.50 also bounced up to 2445.00. The afternoon’s lower low attacked 2396.00 to within 3 ticks. Any lower would no longer be only a correction of Wednesday’s record-setting rally. Meeting and holding corrective limits enabled the rally to resume, which Thursday’s last 60-90 minutes exploited fully. The minimum likely objective for fresh session highs above 2445.00 was doubled, attacking 2499.00 through the futures close — 102 points off the low.
Overnight action’s new info…
The surge’s initial reaction dipped to touch Wednesday’s 2477.75 high. Channeling higher into midnight probed fresh highs attacking 2506.00. Its pullback to 2582.50 hovered there waiting for Europe’s opens, which had a bullish effect. Now another upleg has come within 6 points of the next higher objective at 2519.25. Its reaction down is testing 2506.00 as support.
If, then… (notes to accompany the Tour recording)
Resuming and extending the rally today was likely to target 2525.25. Greeting the open there, or quickly meeting it, could induce the next reaction down. And the next reaction down need not be limited to just being a temporary correction. In other words, the rally from Tuesday night’s 2317.00 low can still qualify as the correction, as the bear market rally of an ongoing decline. Such is the potential influence of Friday Factors, which may already be responsible for yesterday’s portion of the recovery attempt. Not already reversing down by 9:45 could instead see the Friday Factors have a bullish influence. Extending to 2548.00-2546.00 or potentially 2606.00 could still qualify as only a corrective bear market rally.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2498.00 would be unlikely to trigger the 2502.75 bias-up signal at 10:15. Exiting the open above 2505.00 would be likely to trigger bias-up. Exiting the open above 2517.50 would be likely also to exceed the 2514.75 bias-up target at 10:15 to renew the bias-up signal.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2503.00 | 2502.75 |
| …would target | 2515.00 | 2514.75 |
| Bias-down: under | 2482.25 | 2481.75 |
| …would target | 2473.00 | 2472.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| 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)
Wednesday’s record-setting rally had tried resuming overnight. Its 22-point down to 2455.50 was recovered to probe a fresh high up to 2481.50. 
But that failed, and Thursday’s open was greeted by a bounce from 2422.50. The post-open recovery attempt failed, too, getting up to only 2445.00 before eventually resolved down to attack the afternoon’s lowest target at 2396.00.
That ended the correction of Wednesday’s rally, as anything lower would have returned to new lows. The reward for ending the correction was to probe fresh session highs above 2445.00. That was doubled, attacking 2499.00 through the futures close.
The 9-day series heading toward an Up/Down-Crash setup is now invalidated by Thursday’s second consecutive up-session. Which doesn’t require trending up. But resuming and extending the rally Friday would next target 2525.00 and potentially 2606.00. Resuming the decline anyway would be unlikely from opening only slightly weaker Friday.
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))
Wednesday’s extended dip back under a week of prior lows was rejected by Thursday’s open gapping back up above those lows to 1.1450. Extending higher closed above the 1.1500 buy signal, now needing a second consecutive higher close Friday to confirm.
Gold Feb Contract (GC, ETF: (GLD))
Gapping back down Thursday within Wednesday’s range doesn’t invalidate the ongoing rally, but it does add a degree of urgency to not only meeting the 1284.00 target but also exceeding it.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up and probing higher Thursday helps to confirm Wednesday’s breakout, which would require an eventual third higher close.
30-year Treasury Mar Contract (US, ETF: (TLT))
There was only a little more room for weakness under Wednesday’s low, which overnight action tested before Thursday’s gap up to and through the 145-08 buy signal. A second consecutive higher close Friday would resume the rally.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s surge wasn’t going to trigger a reversal signal, but a dip down to 44.15 or 43.25 could start forming a reversal setup. Thursday’s low came within 10-15 cents of the pullback target’s upper-end.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Wednesday’s recovery from having fulfilled the 3.27 target (basis Feb, 3.33 basis Jan) was extended Thursday, which helps to confirm the target does end the decline, and that a bottom can now begin forming.