Posts by Rod David
The First Trade… Getting its sea legs back.
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…
Testing the decline”s 2105.50 target overnight had fulfilled a lot of selling pressure. Probing lower pre-open to the targets”s noise range down to 2103.00 only stretched the rubber band so Wednesday”s open could surge to 2112.00. Triggering a “synthetic bias-up” didn”t prevent returning back down to 2103.00-2105.50. Its next bounce failed, too, right after buyers had barely gained traction. Firming into the close recovered 2105.50 by a couple of points.
Overnight action”s new info…
The late firming extended higher through the Globex open to eventually test 2113.50. It was retested at Europe”s opens, but held. Price action since then has trended back down, mot recently testing 2108.50 and reacting up 2-1/2 points.
If, then…
Buyers gaining traction yesterday afternoon was confirmed by the higher recovery after dipping back down to 2103.00-2105.50. Having gained traction, gapping up is not necessary to resume the rally this morning. But that traction must be exploited this morning by trending up. And gapping down would undermine that traction, potentially also resuming the decline.
First Trade…
Exiting the open at 9:45 above 2112.75 would be likely also to trigger the 2111.0 bias-up signal at 10:15. Exiting the open under 2108.75 would be unlikely to trigger bias-up. Exiting the open under 2103.00 would be likely to trigger the 2104.25 bias-down signal.
Wednesday afternoon”s buyers made an
Wednesday afternoon”s buyers made an effort, and they gained traction for it. Sort of. A little. I described it earlier in the previous blog post (here: http://marketfy.com/product/rod-davids-futures-market-timing/blog/1176/view/87998/), which was sent after that setup had plunged 3-1.2 points to 2105.50. It then extended down to 2103.
2105.50 was the unfinished business left outstanding at Tuesday”s close, and 2103 was the room for noise under it. Both were met on the same day and rejected by the same close. In fact, bouncing into and out of the close probed the late plunge”s 2109 origin.
Meanwhile, Wednesday formed “ineffectual pessimism” by gapping down, spending the entire session in negative territory, probing prior lows, and retracing the afternoon”s fresh low. The setup often resolves by gapping up. Simply not gapping down would help to confirm that Wednesday afternoon”s buyers gained traction.
Perhaps now the unfinished business above can be neutralized. Wednesday morning”s rejection of both bias-down parameters put into play 2115 and 2120.25. Tuesday morning”s no-bias trending requires revisiting 2117.50 if not also 2118.75. And Monday afternoon”s 2128.25 bias-up target requires an eventual test, too. Presumably, all on the way to 2136.25 or higher.
None of which precludes extending down even deeper, first. Details and other markets coverage were discussed during the post-market Warp here:
https://roddavid10.mitel-nhwc.com/join/fbkhyzm
I”ll be checking the chaRTroom during overnight Globex action, which you can monitor here:
XP-Friendly: http://anymeeting.com/029-698-770
xp UN-friendly: https://roddavid10.mitel-nhwc.com/join/shkphyy
Morning bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2117.75 | 2111.00 |
| …would target | 2124.25 | 2117.50 |
| Bias-down: under | 2111.00 | 2104.25 |
| …would target | 2106.00 | 2099.25 |
| 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.
Pre-close view… Pent-up pressure.
The bias environment”s exit at 2:30 was testing the noon hour”s 2108.00 upper-end. The final hour”s entry was testing the bias environment”s 2108.50 upper-end. And fresh highs were probed in between.
This is essentially the formula for buyers gaining traction, but there”s a caveat: This all happened within several ticks of each other, and all on overlapping legs. But we”ll give buyers a benefit of the doubt for gaining traction, since the implication is in-line with the bigger picture scenario.
So, what about the 3-1/2 point plunge back to 2105.50? Good question.
It is aggressive, but its timing is suspicious and it is holding prior lows. Closing back above 2109.00 would confirm it was just last-minute jitters before today”s post-close earnings, worried about more AAPL-style reactions.
Regardless, it”s too late for any rally leg to actually reverse the trend up. At this late stage, price action can only undermine the decline, or extend it.
Daily Spot… Taking care of loose ends.
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 excessive portion of its bounce above the 1.0920 bounce limit was rejected by gapping back down to it Wednesday, although the session essentially only ranged sideways around it. The low”s test of 1.0855 remains likely to be retested.
Gold Aug Contract (GC, ETF: (GLD))
Obligatory support at 1100.00 gave way Tuesday night and gapped down to test 1090.00 where the balance of the session ranged choppily sideways, presumably still targeting a retest of Sunday night”s 1080.00 flash crash low down to 1076.50.
Silver Sep Contract (SI, ETF: (SLV))
Gapping down and extending down Wednesday could probe fresh lows, but still not be likely to start a new downleg, while awaiting a better bottom in Gold.
30-year Treasury Sep Contract (US, ETF: (TLT))
Tuesday”s recovery from gapping down to test 151-00 and recovering back above last week”s 152-10 highs improved overnight to gap up Wednesday and extend higher to 153-15, within almost a half-point of filling the outstanding gap back up to 154-00.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Narrow ranging around 50.00 broke lower to test fresh lows down to 49.25, presumably still targeting 48.25.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Initially firming Wednesday pierced the 2.88 resistance that had retrained much of Tuesday”s session.But the balance of the session only ranged choppily to either side of 2.88 without yet extending higher or reversing down.