Posts by Rod David
Post-open Review… And then some.
Pre-open low fails to hold.
The choppy open has trended down, albeit with wide legs between its lower lows and lower highs. The 1995.00 low’s bounce to 2003.50 was retraced almost entirely before the open. Fresh lows down to 1990.50 reacted up to attack 2000.00, but that resolved down to 1988.50. Another bounce is now also failing.
Ultimately, the bias timing window has now lapsed into the bias environment. No prior high is recovered, let alone challenged. The bottoming potential has largely eroded.
One more line of defense is at 1987.00, and its success would be signaled by exiting the bias environment back above 1995.00. Otherwise, objectives under 1987.00 can be better measured in time than in price — like Wednesday morning, during which time a lot of damage can be done.
Pre-market Tour (recording & summary)
We discussed the pre-open Complex pattern that would allow a fresh opening low to recover sharply this morning — if the fresh low and its recovery were obvious during the opening 15 minutes of volatility.
Otherwise, bouncing too much first, or not already recovering, would open the door to much lower lows.
The recording is below. (The anymeeting back-up room is now available here.)
Details and other markets coverage are discussed in the pre-market Tour recording here:
http://www.anymeeting.com/nrodpywxnayx/E952DF83854A38
Off to an auspicious start.
Good morning! Happy New Year! The stock market is imploding!
The last two days of 2015 declined in a not-small way. Now 2016’s first day is being greeted by a record-sized decline already underway overnight.
Where does that put the market? Well, basis the S&P 500, the drop has now retraced all the way back down to its two-week old lows. That’s how much cushion the “Santa Claus” rally had provided.
The drop’s trigger is purportedly China crashing. An emotional reaction is deserved. Meanwhile, closures among Middle Eastern embassies are clarifying the division between Iran and Saudi Arabia, which probably doesn’t help.
The rule for today is that exiting the weekend with extreme sentiment is often a sentiment extreme. That’s not to justify buying the first tick, only to monitor whether the first hour has made things worse, or better.
We’ll take special interest in any January Effect candidates that end the day in positive territory. But let me know in the comments section of any other stocks of interest.
The First Trade… Crappy New Year!
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o New! Omnistream
o Anymeeting backup
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Friday’s gap down had extended to 2037.00 before bouncing. The bounce touched Thursday’s late lows around 2055.00 before returning to the morning’s lows. The final several minutes plunged to fresh lows attacking 2030.00.
Overnight action’s new info…
Sunday night’s open gapped up and extended higher to 2043.50. That barely attacked Friday’s late-afternoon highs. China began crashing, and even that relatively shallow bounce disappeared. Various countries aligning with either Iran or Saudi Arabia through embassy closings probably hasn’t helped. The balance of the night has been trended down relentlessly, recently touching 1995.00 and then bouncing to 2001.50. That’s basically a 40-point drop.
If, then…
We discussed air pockets Friday morning. The first one under 2030.00 became obvious during last year’s final minutes. The second air pocket under 2029.00 became obvious when China began crashing. The extension from there has leap-frogged several other “lower prior highs” to test one of the last “lower prior highs” remaining. And all of this is retracing in 2-3 days back to two-week old lows. Exiting the weekend with extreme sentiment is often a sentiment extreme. This was the case last weekend, after the morning followed-through shallowly. Exiting this morning’s open already bouncing from its 2-week old prior lows would suggest this leg isn’t extending, either. Otherwise, while the relentlessness might subside, the direction doesn’t have to reverse.
First Trade…
Exiting the open at 9:45 above 2008.00-2010.00 would suggest the overnight decline’s momentum had been absorbed. There is otherwise potential to 1991.00 before putting into play essentially a new leg, perhaps a crash leg greater than August’s.
Shiny new year, same old story.
Happy New Year!
You can monitor Sunday night’s Globex action in the Onstream app that I’ve been testing. It is always the same URL. All devices can access it, but do let me know ASAP if you encounter any difficulty. We’ll still run Anymeeting intraday as a backup during the transition.
As for the market, the Middle East has an escalated a conflict between Iran and Saudi Arabia. That’s likely to pump up Crude Oil prices. Shouldn’t that doesn’t lift ES, back above last year’s last 30-minute or 2-hour plunges? Almost having been joined at the hip during Crude Oil’s slide, this would be an inconvenient time to decouple.