Posts by Rod David
The First Trade… Delayed bottom?
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…
Wednesday’s opening rally up to the morning’s 2001.50 bias-up signal was reversed through the morning to test the 1988.00 bias-down signal, and its room for noise down to 1985.50. A noon hour bounce to 1998.50 spent the afternoon probing fresh lows down to 1982.50. The slide gained traction, albeit as indecisively as possible.
Overnight action’s new info…
Initially firming back up to 1988.00 soon launched a rally that had retraced yesterday’s 1998.50 high into Europe’s opens. Ranging choppily there since then has touched 2000.00.
If, then…
Regardless of whether yesterday’s slide gained traction decisively, rejecting that traction requires decisiveness. That means gapping up this morning back above a relevant level. Immediately recovering the noon hour’s 1998.50 high would be optimal, but the afternoon bias environment’s 1995.50 high could suffice. Exiting the open any lower — especially if post-open action were to duplicate those levels’ overnight tests — would be vulnerable to probing under yesterday’s 1982.50 low by 2-4 points… WedEX was bearish, having closed successively lower from a multi-session range. Usually, that’s irrelevant until Friday, but it can be negated by proxy at Thursday’s open. That would require maintaining a gap up to and through 2002.25.
First Trade…
Exiting the open at 9:45 above 2002.00 would be likely also to exceed this morning’s 1999.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1995.50 would be unlikely to exceed the bias-up target, and opening under 1988.00 would be unlikely to trigger the 1993.50 bias-up signal at 10:15.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2001.25 | 1993.50 |
| …would target | 2007.25 | 1999.50 |
| Bias-down: under | 1988.00 | 1980.25 |
| …would target | 1981.50 | 1973.75 |
| Signal status: BIAS-UP | 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)
Wednesday’s cash session ended at 1986.00 much like Tuesday, with a compelling basis for a hold-short. Also like Tuesday’s close, the lower objectives still in-play at 1980.25 or 1978.75 have potential for launching a pre-open rally if tested overnight.
Unlike Tuesday, sellers gained traction, but not decisively. The bias environment exit and final hour’s entry each were barely piercing their prior timing window lows. But buyers certainly weren’t making an effort, so lower lows remain likely, but also vulnerable to reacting back up.
Meanwhile, Tuesday’s break under the Friday-Monday ranging was confirmed by Wednesday’s second consecutive lower close. The market is topping, as has been expected in this area. Having entrenched themselves, the reversal’s sponsorship may sit back and let one more fresh high trap more buyers. But not already rallying at Thursday’s open probably means the decline hasn’t waited to resume.
Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/mjzrksp
This evening, monitor overnight Globex trading in the chaRTroom at:
XP-Friendly || non-xp ilinc
Pre-close View…Bottomed, yet?
Another fresh low, and now also traction.
The Beige Book release was greeted by a no-bias environment, consolidating down to 1991.50. A favorable knee-jerk reaction up briefly pierced the 1995.50 bias-up signal, and then extended back down to 1988.00. A consolidation there broke lower to test 1983.00.
1983.00 is under both the overnight low and its intraday probe. And it has room below to 1978.75-1979.75 if not rejected immediately.
A reaction up is testing 1988.00. It’s a start. Not really. Okay, maybe a little.
This afternoon has been an ongoing series of lower lows and lower highs. The bias environment exit was piercing under the noon hour’s low and the final hour was piercing under the bias environment’s low. Their traction wasn’t decisive, but buyers weren’t making the effort.
Trending up substantially through the 3:10-3:20 timing window might offset the indecisive downtrend. Otherwise the downtrend remains intact.
Daily Spot… Gold barely skips another beat.
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 Sep Contract (EC, ETF: (FXE, UUP))
Fresh highs Wednesday probed above the 1.1446 prior high that had preceded the 1.1370 gap which was filled last week. Unless rejected by Thursday’s close, the break higher is now targeting 1.1595.
Gold Dec Contract (GC, ETF: (GLD))
Probing the outstanding 1169.00 target overnight had reacted down to 1160.00, but its retest intraday extended up to 1180.00 intraday. And that extended up to 1187.00 in reaction to the afternoon’s Beige Book release. The next higher target at 1195.50 remains in-play so long long as pullbacks now hold 1175.50 as support.
Silver Dec Contract (SI, ETF: (SLV))
Last week’s 16.10 high was tested and retested in the shallowest of ways up to 16.17 Wednesday. Trending any higher should begin by almost literally exploding higher. Any slighter strength would be unlikely to actually trend higher.
30-year Treasury Dec Contract (US, ETF: (TLT))
Filling the gap above back to 158-23 extended higher intraday to test 159-13, with room up to 159-22 before suggesting more than a corrective bounce was underway. Back under 157-30 would signal momentum reversing down.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s gap down didn’t extend lower intraday, but the balance of the session ranged in negative territory. This is “ineffectual pessimism” that requires immediate recovery to avoid trending down sharply Thursday.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Narrow ranging once again failed to exploit that the decline had stopped trending. Thursday’s EIA report isn’t being greeted from a position of weakness, but the potential for an initially negative knee-jerk reaction down can’t be discounted.