Posts by Rod David
The First Trade… Keeping its head down.
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…
Gapping up Wednesday and extending higher to 1991.00 had indicated that strong-handed buyers were taking control after Tuesday’s corrective session. That didn’t prevent the open’s rally from being retraced back to unchanged at 1967.50, but it did indicate that action was counter-trend. In fact, consolidating after filling the gap back to Tuesday’s close was followed by another rally leg back into the morning’s highs. Another reaction down retraced the afternoon’s no-bias trending, and was then recovered into the close, fulfilling an outstanding target at 1988.75.
Overnight action’s new info…
Yesterday afternoon’s late recovery has not extended higher. Instead, yesterday’s no-bias trending was retraced again, and then lower to 1971.00. Now another bounce is testing 1982.00.
If, then…
Buyers didn’t gain traction for yesterday’s efforts, so extending the rally this morning requires gapping up. At least, a durable rally requires gapping up. Probing positive territory from a weaker open could still be productive before failing — there are a lot of news and Fed speakers scheduled, and FOMC Minutes this afternoon. Gapping up and extending higher could retest the FOMC high today or tomorrow. As for gapping down, there is no greater likelihood between ranging narrowly or trending down.
First Trade…
Exiting the open at 9:45 above 1981.00-1982.00 will likely avoid triggering the 1979.00 bias-down signal at 10:15. Exiting the open under 1977.00 would likely trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1999.75 | 1990.00 |
| …would target | 2005.75 | 1996.00 |
| Bias-down: under | 1988.75 | 1979.00 |
| …would target | 1983.75 | 1974.00 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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)
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The no-bias environment’s rally came within 1 point of its 1988.75 target before gravity sneaked in. I never found sellers credible for retaking control since the drop had originated so late. But it did bottom upon retracing both the 1981.00 bias-up signal and the 1977.50 print. And eventually rallying after the position-squaring window did meet the 1988.75 target.
Buyers gained no traction, as exiting the bias environment above the noon hour’s range didn’t extend up into the final hour’s entry. So, resuming the rally Thursday will require gapping up. Extending higher anyway would be doomed to failure. Wednesday had a similar condition, and did gap up — that didn’t prevent an intraday dive but the dive did recover.
Details and other markets coverage are discussed in the post-market Wrap recording here:
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This evening, monitor overnight Globex trading in the chaRTroom at the ilinc platform only this week:
non-xp ilinc
Pre-close View… And a reminder.
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This afternoon’s 1981.00 bias-up signal did not trigger. That didn’t prevent probing above it during the no-bias environment. In fact, its 1986.00 bias-up target was met. And it was tested up to 1987.75.
Exiting the bias environment above its bias-up target can invalidate the no-bias trending that would otherwise require being retraced. Well, despite being poised to do just that, the no-bias trending was retraced back down to its 1981.00 bias-up signal. It was further retraced to the 1977.50 1:20 print.
So, the bias environment was exited above the noon hour’s high, but the final hour was entered lower. Can the 3:10-3:20 window rally 8 points to probe fresh session highs? That’s the only way for buyers to gain traction for today’s efforts.
I’m giving buyers a benefit of the doubt for recovering, anyway — whether through today’s close or by gapping up tomorrow — if only because I’m not seeing distribution that would point lower.
Daily Spot… False breaks
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))
Tuesday’s gap up and intraday extension had gone out probing the pattern’s 1.1265 bounce limit, but Wednesday’s inside day attacked Tuesday’s lows. There is no current signal.
Gold Dec Contract (GC, ETF: (GLD))
Having trended sharply higher during Tuesday’s breakout and then extending higher overnight, Wednesday’s gap up peaked almost immediately up filling its gap back to the high’s close. Reacting down into negative territory did manage to the 2-1/2 week old high close. Reacting down into negative territory was recovered, albeit not decisively enough to confirm Tuesday’s breakout.
Silver Dec Contract (SI, ETF: (SLV))
Tuesday’s extension higher had already indicated the rally was stretched, but Wednesday’s hesitation ranged flat-to-higher, attacking 16.10, and still having room for a pullback down to 15.55.
30-year Treasury Dec Contract (US, ETF: (TLT))
Momentarily probing Tuesday’s low overnight was recovered Wednesday, but only for a largely inside day ahead of Thursday’s auction.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Trading higher into Wednesday’s open to a fresh high at 49.71 was cut short by a surprising EIA report that sent price into negative territory. Tuesday’s breakout wasn’t confirmed.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Wednesday’s opening surge filled the gap back up to 2.52, so that closing above it would now trigger a new upleg. There isn”t otherwise a sell signal.