Posts by Rod David
The First Trade… Backing-and-falling.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
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(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Rallying Monday depended on rallying quickly. Opening at 2098.00 just above Friday”s lows instead quickly collapsed to retest the 2093.00 overnight lows. Not only were overnight lows retested, but they were probed down to 2089.50. Recovering back up to 2098.00 was reversed even more substantially down to 2080.00. The afternoon”s consolidation formed a large triangle that broke higher to 2091.50. Potential down to 2077.00 was ignored, and the relevant 2084.00 level held on a closing basis.
Overnight action”s new info…
Sideways ranging got choppy into Europe”s opens. A dip to 2085.00 was recovered to 2093.50. That has been retraced gradually, and entirely, now probing fresh lows attacking 2084.00.
If, then…
Just putting into play yesterday”s 2088.00 bias-down target was likely also to visit 2084.00, and potentially 2077.00. Having probed 2084.00, closing back above it suggests that the decline is ending, and not just getting underway. Gapping open under 2084.00 could contradict its recovery, at least putting into play 2077.00. By the same token, confirming yesterday”s recovery by maintaining positive territory through any timing window would launch a complete retracement back up to prior highs.
First Trade…
Exiting the open at 9:45 under 2084.00 would be likely to trigger the 2086.50 bias-up signal at 10:15. Exiting the open above 2088.00 would be unlikely to trigger bias-down.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2102.25 | 2095.50 |
| …would target | 2107.75 | 2101.00 |
| Bias-down: under | 2093.25 | 2086.50 |
| …would target | 2087.50 | 2080.75 |
| 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.
2:30 bias environment exit was
2:30 bias environment exit was barely under the noon hour”s low. The final hour”s entry was recovering from piercing the bias environment”s low just moments earlier. It wasn”t enough for sellers to be gaining traction (and the 3:10-3:20 timing window didn”t break the tie).
The afternoon had formed a symmetrical triangle, and it soon exploited the opportunity. My expectation had been for a false break to 2086.50 that resolves down to 2077. Instead, the breakout surged to 2090. If extended even a little, Monday”s late surge could extend a lot — back to Monday morning”s 2098 high, and to new highs if 2099.25 were also recovered.
So, is 2077 off the table? Maybe. At least, its test isn”t necessary, having held a test of 2084. But 2077 would be the objective of an overnight drop, or of triggering bias-down Tuesday morning. And having trended up into Monday”s close, gapping down under Monday afternoon”s low would trigger a “session-long decline” unlikely to be satisfied with only 2077.
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Pre-close view… Traction vs. Attraction.
Stalling on the way to the next lower objective.
Room for noise down to 2077.00 remains outstanding. It doesn”t require being tested, but its test is likelier as timing windows lapse without rejecting the decline.
Now the bias environment has been exited just under the noon hour”s range. The final hour”s entry had momentarily pierced a fresh low, but that didn”t qualify. Extending down to a fresh session low under 2080.00 through the 3:10-3:20 window would confirm that sellers gained traction.
Even if sellers don”t gain traction, fresh lows can be probed tomorrow. But it would be difficult to recover without also probing sharply lower.
Daily Spot… Bond bender.
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))
Friday”s odd detour was retraced a little more deeply into Monday”s open, testing 1.0945 as support what had been the prior downleg”s bounce limit. Its break would target new lows, so rejecting it and recovering without delay may be the only path higher.
Gold Dec Contract (GC, ETF: (GLD))
[Rolling coverage forward to Dec, which trades at a $0.50 discount to Aug] Flat-to-lower ranging supported by 1088.00 sat out conspicuously from otherwise volatile stock and bond market action. Back above 1100.00-1105.00 would be credible for extending sharply higher intraday. Delaying its recovery much past noon Tuesday would instead start to develop a new downleg.
Silver Sep Contract (SI, ETF: (SLV))
Dipping once again back under 14.75 Friday extended lower Monday to test 14.50 support, which should hold to maintain the 14.75 buy signal”s validity.
30-year Treasury Sep Contract (US, ETF: (TLT))
Hardly any hesitation interrupted extending the rally to within 8 ticks of its next higher attraction at 158-08. The rally remains intact so long as 156-24 now holds as support.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Last week”s break under 148.25 targeting 144.25 was extending down already into Monday”s open, and extended down deeper intraday to test 145.10-145.15, which is the last support prior to the 144.25 target.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Bouncing overnight to attack the 2.77 buy signal was retraced Monday morning back down to Friday”s test of 2.70 support. Bouncing again from the filled gap was well within proximity to trigger 2.77 Tuesday if a deeper drop is to be avoided.