Posts by Rod David
Post-open Review… Digging for dollars.
Lower and lower lows meeting target.
Overnight action had been contained within yesterday’s last-half hour range, and that didn’t change until the open. Literally, the open. 
The most recent bounce up to 2935.00 had been retraced to test yesterday’s 2928.50-2929.50 lows at the open, on the way down to 2919.25. Its reaction touched the 2927.75 bias-down signal as resistance.
And the bias-down signal’s resistance resisted. Pretty well. So well, that another fresh low has touched the 2914.25 renewed bias-down target.
At least 1-minute RSI diverged positively at the low, while 3-minute RSI made at least a higher low. So far, the bounce is testing the 2923.00, and back above 2924.50 would help to confirm that backing-and-filling has found its strong-handed sponsorship.
Regardless of a bottom, already recovering some relevant resistance coming out of the bias environment would be bullish. And because the opportunity is being pursued so aggressively, not actually entering the noon hour in recovery mode would be that much more bearish.
The First Trade & Pre-open Tour Recording… Buyers are still laying low.
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…
Tuesday morning’s rally to 2940.00 sapped even more energy from the rally than had been suggested by Tuesday afternoon’s narrow ranging down to 2934.00. The sideways ranging persisted overnight to greet Wednesday’s open. The range expanded slightly intraday — but not to fresh highs, only probing under Tuesday afternoon’s lows. Lower and lower lows that tested 2928.00 through the close, perhaps inhibited ahead of post-close earnings from FB, MSFT and TSLA. Both of Wednesday’s bias-down signals held their tests to avoid triggering, putting into play offsetting tests of their bias-up signals. The morning’s 2942.00 objective remains outstanding, although the afternoon’s 2937.50 bias-up signal was already neutralized to within 3 ticks by Wednesday’s late-afternoon high.
Overnight action’s new info…
Globex immediately popped-up to 2932.50 and continued firming to attack 2936.00. An abrupt reversal retraced it all into and out of Europe’s opens. A 90-minute consolidation supported by 2928.00 got the confidence for a bounce. That has proved to be premature, as a 2-hour consolidation resisted by 2933.00 just spiked down to 2927.00 on MMM miss and lower guidance. But the spike was quickly retraced 5 points to where it greeted the news.
If, then… (notes to accompany the Tour recording)
An entire session elapsed Wednesday without immediately retracing Tuesday morning’s rally, which helps to suggest the rally will resume. It’s another version of pessimism, ineffectual pessimism, which is potentially bullish from a contrarian perspective. A deeper retracement first remains possible, still searching for strong-handed buyers — and a deeper retracement first also remains likely, however brief, unless the open has already recovered back above yesterday afternoon’s 2937.00 high. Note that overnight action has essentially been contained within yesterday’s last half-hour range, so breaking either way within 60-90 minutes of the open will likely retrace. Unfinished business at 2942.00 and 2942.75 should help to limit selling pressure, and to attract price higher.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2930.25 would be unlikely to trigger the 2927.75 bias-down signal at 10:15. Exiting the open under 2925.25 would be likely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2934.00 | 2936.25 |
| …would target | 2940.50 | 2942.75 |
| Bias-down: under | 2925.25 | 2927.75 |
| …would target | 2918.75 | 2921.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | . | |
| 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)
Apparently, Tuesday morning’s rally sapped the market of a lot of energy. The afternoon ranged narrowly sideways, as did the overnight. The range expanded slightly Wednesday, but not to new highs. Wednesday’s three bullish factors are:
- An entire session without immediately retracing Tuesday morning’s rally helps to suggest the rally will resume. Immediately retracing the rally could have recovered, too, but less often. Meanwhile, a deeper retracement is still possible, but with a greater likelihood of recovering.
- Not even piercing a fresh high, if even touching a high, reflects pessimism. Ineffectual pessimism, for not having reversed down. Pessimism is potentially bullish from a contrarian perspective.
- Both bias-down signals held their tests to avoid triggering, which puts into play offsetting tests of their bias-up signals. In addition to Tuesday’s 2942.75 unfinished business, only Wednesday morning’s 2942.00 remains outstanding, since the afternoon’s 2937.50 bias-up signal was attacked to within 3 ticks by Wednesday’s late-afternoon high.
Perhaps anxiousness ahead of post-close earnings like FB, MSFT and TSLA prevented attracting strong-handed buyers to sponsor another upleg. The same influence could have prevented backing-and-filling deep enough to find strong-handed buyers below. It’s really irrelevant, other than to get the event(s) behind the market so its pattern can play out.
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 Jun Contract (EC, ETF: (FXE, UUP))
Extending to fresh lows Wednesday has done more than break under downtrending support that I’ve outlined in the daily videos. Wednesday’s fresh low close has confirmed Tuesday’s breakout from the multi-session range that was formed by the two prior days. At least an eventual third lower close is required before a recovery can be credible.
Gold Jun Contract (GC, ETF: (GLD))
Wednesday’s rally probed the 1277.50 buy signal well into last week’s narrow range. A second consecutive higher close Thursday would confirm, and also likely recover last week’s range to seal a bottom.
Silver May Contract (SI, ETF: (SLV))
Rallying out of Wednesday’s open probed the 14.88 buy signal, stopping pessimistically short of filling the gap back up to Monday’s 14.98 close. A second consecutive higher close on Thursday would confirm.
30-year Treasury Jun Contract (US, ETF: (TLT))
Gapping up Wednesday to 147-00 extended to 147-13, needing to close back under 146-30 to resume the decline still targeting 145-24. Closing above 147-04 would suggest a bigger detour first, probably to 148-00.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s dip only attacked the 65.50 pullback limit, which would likely hold a test since Monday’s confirmed breakout still requires at least an eventual third higher close — and probably a test of the 67.15 upper-end of the room for noise.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Tuesday’s fresh low fulfilled the requirement for it, which was triggered by having entered the weekend at a new trend extreme. Gapping up slightly Wednesday was retraced to fill the gap back down to Tuesday’s close. Once again, Thursday’s EIA avoids being greeted from a position of weakness, but still not from a position of strength.