Posts by Rod David
The First Trade… Pins AND needles.
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 morning’s noN-bias environment extended higher nonetheless, lifting off from the 1970.00 area through its 1977.00 target. The afternoon fulfilled potential to 1985.00 up to 1987.00. The close triggered a bullish WedEX. But buyers didn’t gain traction for the effort — in fact, the bias environment exit was under the noon hour’s low. A post-close surge touched 1989.00.
Overnight action’s new info…
Choppy flat-to-lower ranging has worked its way down to 1981.00 That slightly overlaps the highs of both yesterday morning’s bias environments, while dipping under the noon hour’s 1983.50 highs.
If, then…
The rally satisfied 1977.00 and 1985.00 targets yesterday. Not in the same timing window, and not without a corrective dip between them, but in the same session anyway. So much buying pressure satisfied so recently should naturally devolve into a pullback, even in the most bullish scenario. Anxiousness ahead of FOMC statements can cause a defensive pullback in a hesitating environment. So, it might seem a likely catalyst to profit-taking when there are such great profits to take. Perhaps. But yesterday’s targets were less a product of fulfilling previous optimism, and more of position-jockeying ahead of expiration. No doubt, the recovery is extended, but it’s vulnerable to becoming more extended. Delaying a logical pullback much past the open could spark a counter-intuitive upleg into noon. I’ll be prepared for a morning pullback if that’s indicated, but the market seems intent upon greeting this afternoon’s FOMC events optimistically.
First Trade…
Exiting the open at 9:45 under 1985.00 would be unlikely to trigger the 1988.25 bias-up signal at 10:15. Exiting the open above 1989.75 would be likely to trigger bias-up. Exiting the open under 1978.00 would be likely to trigger the 1979.50 bias-down signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1998.50 | 1988.25 |
| …would target | 2005.25 | 1995.00 |
| Bias-down: under | 1089.75 | 1979.50 |
| …would target | 1082.50 | 1972.25 |
| Signal status: NO-BIAS | 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… Non-stop.
Even after satisfying potential to 1985.00 and hovering there through Wednesday’s cash session close, a post-close surge touched 1989.00. I had cautioned much earlier not to underestimate the upside momentum. The rally has been sponsored by position jockeying ahead of Friday’s expiration. Excessive optimism just wasn’t a concern. Mechanics will always win out over sentiment.
Sometimes mechanics can become extended, too. Closing AT 1985.00 instead of above it, or below it without yet satisfying it, doesn’t require extending higher. And Wednesday afternoon’s buyers didn’t gain traction to earn the same reward that Wednesday owed to Tuesday afternoon’s buyers.
Meanwhile, having triggered a bullish WedEX, the rally could afford to rest on its laurels and allow a pullback Thursday morning. It’s the last opportunity for unsponsored price action, ahead of the afternoon’s FOMC events. Extending higher anyway or eventually would next target 1996.00 and potentially 2020.00.
Details (yes, there’s still details) and other markets coverage (yes, there’s other markets) were discussed during the post-market Wrap here:
https://roddavid10.mitel-nhwc.com/join/yptkjpk
This evening, use these links to monitor overnight Globex trading:
XP-Friendly || non-xp ilinc
Pre-close View… Still holding up.
The bias environment’s dip to 1975.00 was almost 9 points under the noon hour’s exit. That was the only consequence of not triggering this afternoon’s 1978.50 bias-up signal, despite having probed above it to 1983.75.
As if that consequence wasn’t limited enough, now the high has been retested. And the potential to 1985.00 has been fulfilled within 3 ticks.
Back under 1980.50 would signal momentum reversing down to fresh afternoon lows. But I would continue to caution against getting very bearish very quickly, because a lot of this is driven by expiration, which can have more staying power than sentiment.
Daily Spot… Gold gets going.
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))
One last blip-down at Wednesday’s open may have marked the end of digesting last week’s confirmed breakout. Quickly recovering into positive territory can now extend higher without further delay to produce at least a third higher close.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s 61.8% retracement of the recovery from the 1098.40 target proved a launching pad for Wednesday rocketing through 1111.00 and sharply higher to attack 1124.00. The rally remains intact and targeting 1141.50 so long as pullbacks hold 1114.50
Silver Dec Contract (SI, ETF: (SLV))
Gapping up Wednesday from 14.35 support extended higher through 14.65 resistance to fresh highs attacking 15.00. The rally targeting 15.35 remains intact so long as pullbacks now hold 14.80.
30-year Treasury Dec Contract (US, ETF: (TLT))
Tuesday’s plunge through its 153-12 objective ranged narrowly Wednesday under prior lows, still having potential for extending down to 151-30 unless 152-30 were recovered.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Days of narrowly ranging flat-to-lower above support reacted up sharply on Wednesday’s EIA report. But closing above 46.00 only stretches the rubber band to snap back down if there’s no second consecutive higher close Thursday.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Not confirming Monday’s close above 2.77 on Tuesday extended down deeper Wednesday, for what could be a healthy and constructive retest 61.8% back into the prior channel at 2.68. But that extended down to 2.65, the maximum weakness without actually reversing the trend down. Closing above the channel would have greeted Thursday’s EIA report from a position of strength, but this is not necessarily a position of weakness.