Posts by Rod David
The First Trade… Hard landing, on AAPL’s 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…
We knew before Monday”s close that not gapping up Tuesday would mean trading flat-to-lower, probably trending down, but to no particular degree. Selling could hardly wait, and could barely stop. A pre-open touch of the 2117.50 bias-down signal had held, but it was broken sharply after triggering no-bias. And it extended down to 2108.00 intraday, triggering the afternoon”s bias-down. Optimism ahead of AAPL”s earnings enabled bouncing back to 2113.00 and then to 2114.00, leaving unfinished business below at the 2105.50 bias-down signal.
Overnight action”s new info…
AAPL”s earnings warning triggered a plunge through Tuesday”s low to 2107.00. It was extended overnight to touch 2105.50. Briefly probing lower another point was recovered back up to 2108.00, and now 2105.50 is trying to hold another test.
If, then…
Room under the 2105.50 target includes 2103.00. Its test will be likely if the open isn”t being greeted by a recovery already underway back into positive territory. Extending down is possible, but less likely since sellers gained no new traction yesterday afternoon.
First Trade…
Exiting the open at 9:45 above 2112.25 would make the 2109.00 bias-down signal unlikely to trigger at 10:15. Exiting the open under 2105.50 would be likely to trigger the 2109.00 bias-down signal. Exiting the open under 2103.00 would be likely also not to have recovered the 2103.75 bias-down target at 10:15 which would renew the bias-down signal.
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2122.00 | 2115.00 |
| …would target | 2127.00 | 2120.25 |
| Bias-down: under | 2115.75 | 2109.00 |
| …would target | 2110.75 | 2103.75 |
| Signal status: NO-BIAS, TESTED BOTH BIAS-DOWN PARAMETERS | 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.
More unfinished business above can
More unfinished business above can be added to Monday afternoon”s 2128.25 bias-up target that was left outstanding. Now also Tuesday morning”s 2117.50 bias-down signal must be revisited, since the drop under it originated during a no-bias environment. (Often, the 10:15 pint is also revisited, which is 2118.75.)
Adding objectives that lie on a path to an existing objective might seem unnecessary. But more than just another attraction above, it is extra context for knowing the current drop”s sponsorship is weak-handed. And that”s the assumption, that the rally will resume.
New unfinished business below was added, too. Tuesday afternoon”s 2105.50 bias-down target was triggered cleanly, and the attempt to invalidate it stopped short. It can be tested overnight and already rejected before Wednesday”s open. It may not be tested at all at this stage.
LAST-MINUTE ADDITION:
AAPL”s earnings came with a warning and lower sales in China. S&Ps had bounced to 2115.50 through Tuesday”s close, but plummeted to a fresh low at 2107.25 (so far).
More detail and other markets coverage is in the post-market Wrap:
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Pre-close view… The longest yard.
Now there”s also unfinished business below.
This afternoon”s 2111.00 bias-down signal triggered cleanly. Bouncing 5 points into the bias environment”s exit tested 2113.00, which would have easily invalidated the bias-down but for one thing — the bias environment had already produced fresh lows after 1:20. So, the 5-point bounce was 1 point too low.
In fact, that bounce was retraced back down to within 2 ticks of the 2108.00 low. That didn”t extend to resume the decline. Swings continue overlapping 2111.00. But 2105.50 is unfinished business below that requires an eventual test.
Nothing is preventing 2105.50 from being met today, but it is getting a little late not to have broken lower yet. Nothing is preventing 2105.50 from being met overnight, either. Its reaction could rally enough to gap up at tomorrow”s open.
Regardless, the sponsorship of today”s decline is known already to be weak-handed. This morning”s no-bias trending under its 2117.50 bias-down signal has yet to be retraced, and this afternoon”s bias environment exit and final hour entry didn”t trend down under support.
Daily Spot… a lot of waiting patterns.
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))
Monday”s ongoing test of the decline”s 1.0855 target reacted up Tuesday to probe the 1.0920 bounce limit up to 1.0970. That”s a wide margin, and creates a lot of room to absorb selling pressure if Wednesday were to fill the gap back down to 1.0855 and lower. There is otherwise no active buy signal.
Gold Aug Contract (GC, ETF: (GLD))
Overnight and pre-open ranging around 1100.00 narrowed intraday Tuesday, but persisted nonetheless. Probing under it would be likely to retest Sunday night”s low down to 1076.50. Back above 1122.20 first would be bullish.
Silver Sep Contract (SI, ETF: (SLV))
Choppy but flat ranging around 14.80 Tuesday absorbed Sunday/Monday”s shock to the system from its sympathy to Gold”s flash crash. There is no active signal.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping down slightly Tuesday and probing under 151-14 was reversed into positive before territory by noon, keeping alive the upward momentum and its potential to 154-00.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday”s fresh low under 50.00 was initially retraced overnight into Tuesday”s open. The session ranged narrowly sideways, still likely to break lower targeting 48.00.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Monday”s recovery back above the 2.83 pullback limit was extended overnight to probe above Monday afternoon”s recovery high. Gapping up to immediately test 2.88 was the beginning of an entire session consolidating narrowly at 2.88. But since closing Tuesday above 2.83, Wednesday should confirm.