Posts by Rod David
Post-open Review… Waiting for reinforcements.
Optimistic open has yet to push higher.
A pre-open surge through 2569.00 had probed fresh overnight highs up to 2574.00, before greeting the open back down at 2569.00. A few post-open points lower reacted up to attack 2578.00.
2578.00 is a 61.8% retracement of yesterday’s high-to-low drop, and its resistance held. Now 2569.00 is being tested again as support.
All of which is taking place in a bias-up environment. Renewed. A reaction down has room down to the 2558.25 bias-up signal as support, but no requirement to test it. Back above 2574.50 could extend up to 2595.50, and still maintain the decline’s momentum.
RSIs don’t reflect any increase in buying pressure, so not actually trending up soon would become very vulnerable to unimpressed sellers pushing price back down.
The First Trade & Pre-open Tour Recording… Hope still springing.
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 <<==
I AM AWAY FROM THE SCREEN DURING THE FIRST HALF-HOUR
Through the prior close…
Sunday night’s initial 13-point bounce attacked 2617.00, but began breaking lower before Europe’s opens, and kept breaking lower through it. Greeting Monday’s open under Friday’s low at 2593.00 — still within last Monday’s range — suddenly plunged to new lows at 2571.00. Bouncing 35 points probed back into Friday’s range and into positive territory but stopped just ticks short of reversing momentum up. Having only refueled sellers, the decline established a likely target at 2555.00 that was met going into the final hour. The position-squaring window touched 2533.50, but 2555.00 was recovered through the close.
Overnight action’s new info…
Yesterday’s late recovery initially extended up to 2569.00, where China headlines triggered a reaction down to 2553.00. The test of yesterday’s close(s) essentially avoided negative territory, and recovered to attack the earlier 2569.00 high.
If, then… (notes to accompany the Tour recording)
I AM AWAY FROM THE SCREEN DURING THE FIRST HALF-HOUR. Yesterday’s morning’s big bounce and its potential for recovery wasn’t only retraced entirely. It was retraced relentlessly, but not very quickly. The slow descent reflects the ineffectual side of the optimism coin, the flip-side to the morning’s excessively optimistic bounce. Both are bearish from a contrarian perspective, so two of the three important questions are whether Monday’s ultimate low neutralized that bearishness, and if any new bearishness gained traction. The new low close keeps the decline intact, but a lot of calculable selling pressure was met and held — this leg’s 2530.00-2538.00 objective was met down to 2533.50, and then recovered to hold the morning’s 2555.00 target. So, early strength would be credible for a morning bounce. By the way, the third important question to ask is whether any new optimism is joining yesterday’s, and the answer may be yes with last night hovering exclusively in positive territory. Another corrective bounce could test 2595.50 without threatening the decline’s lower objectives at 2530.00 which can be met on the way down to testing 2500.00. I AM AWAY FROM THE SCREEN DURING THE FIRST HALF-HOUR.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2555.00 would be unlikely to trigger the 2558.25 bias-up signal at 10:15. Exiting the open above 2563.00 would be likely to trigger bias-up. Exiting the open above 2566.00 would be likely to exceed the 2564.75 bias-up target at 10:15 to renew the bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2554.75 | 2558.25 |
| …would target | 2561.25 | 2564.75 |
| Bias-down: under | 2539.50 | 2543.00 |
| …would target | 2531.00 | 2534.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| NEW: 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)
Saturday Review had updated the bigger picture decline, and Friday’s effect on resuming it this week. 
Sunday night was a bit deceptive, bouncing 13 points to attack 2617.00 before Europe’s opens. Breaking lower to greet Monday’s open down 11 points at 2593.00 became even more explicit by plunging post-open to 2571.00.
Bouncing back up to 2606.00 probed back into Friday’s range and into positive territory. But stopping ticks short and minutes late of rejecting the morning’s drop made the entire bounce a refueling of sellers. Their reward for fresh lows was fulfilled coming out of the noon hour, and their likely target at 2555.00 was met going into the final hour.
Such a big bounce during the morning, and potential recovery, only to retrace entirely. Such a slow descent as fresh lows relentlessly dipped lower and lower. Excessive optimism above, ineffectual optimism below. Both being bearish from a contrarian perspective.
Another corrective bounce could test 2595.50 without suggesting momentum is met down to 2533.50, while 2530.00 remains outstanding, probably on the way down to testing 2500.00.
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))
Friday’s gap down within the prior low’s range allows a rally to begin without delay. Sunday night’s rally into “higher prior lows” would be credible for extending into a recovery if followed by a second consecutive higher close Tuesday — especially above 1.1470.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s dip down to 1237.00-1240.00 support had held through the close, enabling at least a corrective bounce up to last week’s 1254.50 high. Meanwhile, breaking back under 1240.00 would invalidate the bounce and signal a new downleg underway.
Silver Mar Contract (SI, ETF: (SLV))
Sunday night’s bounce attacked Friday’s break under uptrending support at 14.71. Monday probed above it, still facing resistance at the gap back up to Thursday’s 14.83 close.
30-year Treasury Mar Contract (US, ETF: (TLT))
Still fluctuating Monday between the 141-24/143-08 buy and sell signals gravitated higher to at least touch the buy signal Monday, still needing to trigger or else react down aggressively.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The ongoing range persisted coming out of the weekend, still likely to probe a fresh low momentarily for its rubber band effect to snap back up into a rally leg.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Greeting the weekend by breaking to fresh lows in this product tends to persist coming out of the weekend, which was done by gapping down even lower Sunday night. Trending down sharply intraday to 3.54 offers an opportunity to form a bottoming pattern, still having intraday risk down to 3.33.
.