Posts by Rod David
The First Trade… That’s gonna leave a mark.
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 down and trending down Thursday somewhat duplicated Wednesday morning”s pattern. But where Wednesday bounced into the afternoon, Thursday morning”s decline extended. And extended. And extended. A last-minute plunge essentially doubled the entire post-open drop that had preceded it. The cash session close fulfilled the 2035.00 objective that was targeted by a break under 2077.00, on the way down to 2025.50. And the gap down served by proxy to clearly define a bearish WedEX signal.
Overnight action”s new info…
Firming up to 2029.00 suddenly gave way to another plunge testing 2015.00, which soon extended down to test 2009.00 before midnight. Bouncing recovered to within 1 tick of 2029.00, but that reacted back down to 2018.00.
If, then…
If the open isn”t already recovering above the 2035.00 area, then the overnight recovery attempt will have likely failed. The consequence could fall far below the overnight low — not necessarily easy, but easier. This may seem counter-intuitive since the overnight low is much deeper. But the overnight drop has cleared a path that enables lower lows. And don”t underestimate how much stronger a trending effort can be when it bites down with expiration”s teeth. Meanwhile, this being expiration, trending through the opening 15 minutes tends to define the balance of the session. And this being a Friday, the morning”s bias tends to persist through the noon hour anyway.
First Trade…
Exiting the open at 9:45 under 2020.75 would be likely to trigger the 2023.75 bias-down signal at 10:15. Exiting the open above 2027.75 would be unlikely to trigger bias-down. Exiting the open under 2016.50 would be likely also to exceed the 2019.75 bias-down target at 10:15 to renew the bias-down signal.
Closing at 2077 Wednesday didn”t
Closing at 2077 Wednesday didn”t qualify as breaking under it, especially since that was the cash session close. Extending down under it through Wednesday”s futures close wasn”t predictive. But it was probably a little more than coincidental for Wednesday”s decline to resume overnight, greeting Thursday”s open sharply lower.
And having then broken under 2077, the next lower objective at 2035 could be put into play. At least, closing under 2077 would put it into play. No longer necessary, as 2035 was already fulfilled during Thursday”s final minutes. Its final cash session minutes.
Futures extended down sharply from there to 2024.50. Once again, it was too late to signal the next lower objective in-play. And once again, that doesn”t prevent extending down, anyway. Expirations tend not to contain trend reversals, and the trend is currently down. That wouldn”t preclude snapping back up during Friday morning before the bearish WedEX”s influence arrives that afternoon. Nor would it prevent inverting the WedEX to bullish — not impossible, but not likely.
Details and other markets coverage are in the post-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/wzjkphp
Tonight”s chaRTroom links, which you”ll need after 6:30ET:
Win XP-Friendly — http://anymeeting.com/077-996-144
non-xp friendly — https://roddavid10.mitel-nhwc.com/join/shkphyy
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2038.25 | 2035.00 |
| …would target | 2045.25 | 2042.00 |
| Bias-down: under | 2027.00 | 2023.75 |
| …would target | 2023.00 | 2019.75 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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.
Pre-close view… Playing right into expiration’s hands.
Fresh lows into late-afternoon are creating an inflection point.
Did sellers gain traction? The bias environment exit was starting to probe under the noon hour”s 2042.75 low. The final hour was entered lower, but the 3:10-3:20 timing window didn”t extend under the 2038.50 low.
Yesterday”s price action was close enough to expiration that we could assume its influence had exacerbated the decline to some degree. Today is only closer. You would think that price has overly adjusted for tomorrow. And it may have.
But at the same time, price is becoming newly-vulnerable to falling off the precipice.
Either recent selling did get carried away in adjusting exposure for expiration, or else that selling has stretched the rubber band to its breaking point. The bearish WedEX can invert to having a bullish influence if the selling pressure it identified is already expended — and a lot of selling pressure has been expended.
Daily Spot… Go, gold. See ya, Silver.
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 open gapped up from Wednesday”s close at 1.1120 resistance and extended higher until fulfilling its 1.1220 target. Closing higher Friday would confirm the trend had reversed. up. This is otherwise the upper-end of the range.
Gold Dec Contract (GC, ETF: (GLD))
Gapping up Thursday quickly extended to fulfill the 1144.00 target, but continued rallying to test 1153.30. Maintaining the rally”s momentum to next taget 1169.00 at this stage requires pullbacks to be shallow holding 1147.50 and for the next close to be higher .
Silver Sep Contract (SI, ETF: (SLV))
Gapping up Thursday didn”t extend higher intraday. And it held its test of last week”s prior highs. In both cases, price action underperformed Gold, suggesting that a pullback first might help them to lock back in tande..
30-year Treasury Sep Contract (US, ETF: (TLT))
Reacting up from Wednesday”s opening test of the 157-14 sell signal to end the day testing the 158-26 buy signal was extended higher immediately Thursday by trending up intraday to fresh highs up to 160-08. Probably spurred on by a flight-to-quality from falling stocks, while a retest of the recent 160-22 overnight high is likely, not reversing down already before noon could turn the rally exponential..
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-lower ranging Thursday doesn”t undermine the decline”s momentum, but it does open the door to forming a buy signal if fresh lows aren”t being probed into the weekend..
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Reaction to Thursday”s EIA report triggered a surge that probed above 2.77, but it held as resistance through to allow another probe of fresh lows that can fulfill unfinished business below before a durable rally might form..