Posts by Rod David
The First Trade… Size doesn’t matter (as much as this).
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…
Thursday’s open under 1918.00 had put into play 1899.00. Meeting it, and gapping down, reflected a lot of pessimism. Isolating that sentiment to a single timing window prevented new sponsorship so we could anticipate a bottom. Recovering through the afternoon well above the morning’s highs attacked 1927.00. And buyers gained traction for their effort to suggest more upside.
Overnight action’s new info…
Initially blipping down to 1913.00 was recovered as quickly to attack 1928.00. Sideways ranging finally started breaking higher after midnight. A brief consolidation up to 1941.00 is now being tested as support, following an interim spike up to 1951.00.
If, then…
One obvious question this morning is whether the bullish scenario is fulfilled already. Rallying 54 points in 18 hours doesn’t confirm the 1899.00 objective’s significance, any more than the decline’s big bounces off of its 1938.00 and 1918.00 objectives. Much more revealing than its size is that last night’s bounce is probing above prior sessions’ highs, something which the prior bounces did not. One other obvious question is whether the overnight 25-30 point rally already has rewarded yesterday afternoon’s buyers for gaining traction. This being a Friday, that answer could define much of the day’s direction.
First Trade…
Exiting the open at 9:45 above 1938.00 would be likely also to exceed this morning’s 1936.25 bias-up target at 10:15 to renew the bias-up signal.
Post-market Wrap (recording & summary)
[Click here for the Morning Bias]
Thursday afternoon’s buyers gained traction for their efforts, and their reward should be to spend the next morning trending higher. Sometimes that’s delayed. But Thursday afternoon’s recovery retraced far enough into the prior two sessions’ range at 1924.50 — and without reacting down to close back under the range’s 1918.00 lower-end — that Thursday afternoon’s recovery should extend higher Friday morning.
Actually closing above 1924.50 would have been optimal. Having trended up into Thursday’s close, gapping down Friday under its 1902.00 bias environment low would instead trigger a session-long decline. Being a Friday, the morning’s bias tends to persist well through the noon hour, in whichever direction.
Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/vsxzpkt
This evening, monitor overnight Globex trading in the chaRTroom at:
XP-Friendly || non-xp ilinc
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1942.25 | 1931.00 |
| …would target | 1947.50 | 1936.25 |
| Bias-down: under | 1924.25 | 1913.00 |
| …would target | 1918.50 | 1907.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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.
Daily Spot… Gold goes for the gold.
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))
Thursday’s gap up extended a little higher before reversing back down through the balance of the session, albeit maintaining positive territory. An eventual third lower close in the pattern remains outstanding, and a corrective bounce now may have run its course.
Gold Dec Contract (GC, ETF: (GLD))
The two prior sessions did not form a stable base, but that didn’t prevent Thursday’s oversized reaction that probed above the rally’s 1141.50 target to almost 1156.50. Back under 1147.00 would stat to target 1138.70.
Silver Dec Contract (SI, ETF: (SLV))
Breaking higher during Thursday afternoon in delayed sympathy with Gold stopped pessimistically short of filling the gap back to Monday’s 15.20 close. That’s potentially bullish from a contrarian perspective.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s shallow pullback didn’t launched an overnight rally as a flight-to-safety triggered a gap up Thursday to test 157-04 resistance up to 157-16. Gapping down Friday could form an Island — a vulnerability if stocks extend Thursday afternoon’s recovery. But holding 156-04 would keep alive the upside momentum.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows for the resumed decline were printed Thursday, down to 43.70 during the afternoon, still likely to continue deteriorating.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was not being greeted from a position of strength, or from weakness. An initially negative knee-jerk reaction down under the two-day consolidation wasn’t required, but it would be likely to recover. The news reaction was down, and it did recover back into the range. Almost any higher high Friday would be credible for extending intraday.
Pre-close View… An amazing turn of events.
Rally off of the morning’s target has gained traction.
We’ve come a long way from the morning’s test of its 1899.00 objective. The final hour’s entry had just probed 1926.00.
We’d come a long way already from this morning’s open under 1918.00, which put into play 1899.00. Not to mention the likelihood for testing it this morning.
And now there’s potential for coming even further tomorrow. The bias environment’s 1916.00 exit at 2:30 was above the 1913.00 noon hour’s high, and the final hour’s 1924.00 high was above the bias environment’s 1917.00 high. Buyers have gained traction.
Closing above 1924.50 would help to avoid any interim dip before rewarding today’s buyers tomorrow morning. But having probed already above 1924.50 does make that a little less relevant.
If this setup can’t hasn’t been improved significantly by noon tomorrow, then it’s probably because a much bigger decline has developed.