Posts by Rod David
The First Trade… Back in the saddle.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Monday choppy open attacked Sunday night’s 2019.50 high to within only 6-9 points. It ultimately slid through the noon hour to test its lowest objective at 1983.50. Rallying through the noon hour back to attack 2010.00 consolidated around unchanged. Not until the 3.37-3:52 position-squaring window began lapsing did price firm back to the morning’s highs. That was too late to gain traction for the effort, but no “unfinished business below” was left outstanding.
Overnight action’s new info…
Initially extending higher Monday night attacked Sunday night’s 2019.50 high to within 3 ticks. Consolidating back down to 2010.00 finally resumed rallying at Europe’s opens. Attacking 2027.00 has since been consolidating.
If, then…
A trending effort that doesn’t gain traction requires gapping up above relevant resistance to extend the trending without delay. Tuesday’s relevant resistance is 2022.50, which is being probed. Maintaining its recovery would next target 2032.00-2033.00 and a test of 2040.00. Rejecting 2022.50 through the open could find support at yesterday afternoon’s 2001.25-2005.00 “lower prior highs” before threatening to resume the decline.
First Trade…
Exiting the open at 9:45 above 2026.25 would be likely to renew the bias-up signal by also exceeding its 2022.50 bias-up target through 10:15. Exiting the open at 9:45 under 2015.25 would be unlikely to trigger the 2017.25 bias-up signal at 10:15.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2026.25 | 2017.25 |
| …would target | 2031.25 | 2022.50 |
| Bias-down: under | 2011.75 | 2003.00 |
| …would target | 2006.75 | 1997.75 |
| 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.
Post-market Wrap (recording & summary)
Monday’s open could have recovered Friday afternoon’s last relative high at 2015.25 and reversed momentum up. That was 13 points above Friday’s close, but it was probed several time, by 4 points at one point.
Closing above 2015.25 would have at least signaled the decline ended, so that a bottom could form. A late break higher came within 3 points when it mattered. It was touched 3 minutes after that.
Despite preventing the morning’s slide from extending, buyers gained no traction for their effort. Monday’s buyers. Gapping up Tuesday above a prior high like 2022.50 would signal new sponsorship had arrived, targeting 2040.00. But gapping down under Monday afternoon’s 1997.00 low would form a “session-long decline, targeting nothing good.
Details and other markets coverage are discussed in the post-market Wrap recording here:
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Pre-close View… Wasting time.
Drop recovered, but not reversed.
A lot of energy went into this morning’s sell-off. It had held 2011.00 before reversing down 28 points to test the lowest calculable objective at 1983.50 into the noon hour. The noon hour’s bounce retraced almost all of it to attack 2010.00.
There has been no improvement since then. And not much deterioration.
The afternoon bias environment was likely to range sideways choppily, and it did. Because it did, there’s no new pattern requiring new trending, or retracing any deeper.
The stability may seem like strength. But stability is only delay. Leveraging the stability to close above a relevant prior high would reflect strength. That relevant prior high continues to be from Friday afternoon at 2015.25. And it continues to hold.
Unless another rally were to begin momentarily, no hold-long will be considered, and there is still vulnerability to drifting down into the close.
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 Dec Contract (EC, ETF: (FXE, UUP))
Friday’s reaction down from filling the gap back to last Wednesday’s 1.1020 high still had potential to probe Wednesday’s 1.1045 before reversing down. Monday’s probe above 1.1045 wasn’t rejected by the afternoon, but now any weakness would be more credible for reversing down.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s reaction up from its shallow morning dip had stopped short of actually recovering 1077.70 to reverse momentum up. Monday reacted back down to attack Friday’s 1065.50 area low, trending down on an inside day, so closing above 1077.70 would still launch a rally.
Silver Mar Contract (SI, ETF: (SLV))
Trending down Sunday night to fresh lows wasn’t recovered intraday, confirming Friday’s breakout, and now requiring at least an eventual third lower close potentially targeting 13.55.
30-year Treasury Jan Contract (US, ETF: (TLT))
Monday’s reaction back down under 157-04 and 156-15 extended down to fill the gap back to Thursday’s 155-08 gap. No unfinished business above is outstanding, so closing under 154-30 can launch a new downleg.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing fresh lows Sunday night was already bouncing into Monday’s open, which extended higher intraday back into positive territory. A second consecutive lower close confirming Friday’s breakout was avoided. But closing above 36.70 is needed to launch a rally leg.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Friday’s confirmation of Thursday’s breakout had then required at least an eventual third lower close. Trending down already Sunday night and extending intraday Monday fulfilled the objective. But the pattern is not likely to reverse up durably immediately, not without first touching 1.80.