Posts by Rod David
The First Trade… Too much, too late.
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…
Sunday night”s plunge had been retraced considerably before the open. Its reaction down held the 2050.50 bias-down target and recovered the 2058.25 bias-down signal, putting into play tests of both bias-up parameters. The 2066.00 bias-up signal was probed to within 2 points of the 2072.25 bias-up target. Reacting down into the noon hour extended back to within 1 tick of 2050.50 at the bias environment”s low. A reversal pattern there was recovered to 2061.25 into the close.
Overnight action”s new info…
The final hour”s rally extended to 2065.00 by the futures close, and then to 2072.75 through the Globex open. Dipping to 2067.00 was recovered and extended higher to 2078.00 — within 1 point of Thursday”s reaction to the Employment Situation report. Its 9-point reaction down to 2068.00 is now 2 points under yesterday morning”s high.
If, then…
Yesterday”s buyers didn”t gain traction for their effort. In fact, sellers nearly gained traction, exiting the bias environment under the noon hour”s low. But neither the final hour”s entry nor the 3:10-3:20 window extended down. The final hour”s rally expended buying pressure without gaining traction for the effort. Not reversing down this morning all but requires gapping up above yesterday”s high and extending aggressively with little delay. The 2072.25 unfinished business above might have enabled that, but its attraction is now neutralized. Reacting down from within 1 point of touching Thursday”s Employment report reaction might reflect some degree of pessimism, which can be bullish from a contrarian perspective. But that influence should be obvious soon after the open if it”s valid.
First Trade…
Exiting the open at 9:45 above 2070.25 would be likely to trigger the 2067.00 bias-up signal at 10:15. Exiting the open under 2066.00 would be unlikely to trigger bias-up.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2074.75 | 2067.00 |
| …would target | 2079.75 | 2072.25 |
| Bias-down: under | 2064.25 | 2056.75 |
| …would target | 2057.75 | 2050.25 |
| 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.
Monday morning”s bounce left unfinished
Monday morning”s bounce left unfinished business above at 2072.25, attacked to within 2 ticks. The reaction down left no unfinished business above, holding a test and retest of the 2051.25 bias-down target, without even triggering bias-down. The final hour”s entry was so near the bias environment”s low that it easily could have gained traction, but bounced instead.
I noted other unexploited setups previously on the blog and during the post-market Wrap. Each has the same meaning, that sellers weren”t strong-handed.
That doesn”t prevent another dip. Closing at or above 2061.50 at least suggests a dip would be recovered instead of extending down. Closing above 2066-2067 would have been optimal , and extending higher after the close to 2067.25 still doesn”t prevent an temporary dip. But a dip should be just that, temporary. If a decline does get underway, then testing 2040.25 can be pivotal going forward.
More detail is in the post-market Wrap recording, here:
https://roddavid10.mitel-nhwc.com/join/yptxvsy
[Check this post”s comments section after 6pm ET for the overnight chaRTroom links]
Pre-close view… Last chance to trap shorts.
Deeper afternoon dip is still holding support. Barely.
The 2051.25 bias-down target was touched, despite being a noN-bias environment that avoided triggering bias-down. Back above 2054.25-2056.00 would reversing momentum back up to test 2062.00 if not also 2066.00-2067.00.
Above or below 2066.00-2067.00 is still predictive. Closing above it would help the afternoon”s recovery to extend higher overnight, and probably much higher tomorrow. Closing under it would enable today”s bearishness to persist, making an overnight bounce likely to fail.
That”s the close. Meanwhile, the bias environment was exited under the noon hour”s low. Entering the final hour under the bias environment”s 2051.25 low would give the decline traction for extending down tomorrow morning. A retest of Sunday night”s lows would be targeted, with no requirement to hold them or to recover.
Daily Spot… Greece ripples effect.
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))
Sunday night”s gap down only attacked the prior Sunday”s 1.0981 opening gap before recovering back into positive territory at 1.1108. Its retracement stopped optimistically short of even touching the overnight low, but its reaction up was resisted by last week”s closes. Fresh lows remain likely so long as the 1.1120 bounce limit holds.
Gold Aug Contract (GC, ETF: (GLD))
Sunday night”s $6 gap up to 1174.00 had reacted down to 1162.00 before Monday”s open. That was recovered to attack 1174.00. It”s not optimal for a bottom, but back above 1175.00 would start to signal momentum reversing up.
Silver Sep Contract (SI, ETF: (SLV))
Sideways ranging continued avoiding whatever influences have been keeping gold under pressure. Closing at 15.75 which the past two weeks have repeatedly overlapped still keeps the decline from extending.
30-year Treasury Sep Contract (US, ETF: (TLT))
Sunday night”s flight-to-safety triggered a probe above last week”s 151-15 high up to 151-26. Its reaction down to 150-13 was recovered to a fresh post-open high. Back under 150-06 would signal momentum reversing down, eventually targeting fresh lows under 147-14.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows Sunday night tested support at 53.25 by more than a dime. And that was exceeded after the close down under 53.00. The decline”s momentum remains intact so long as bounces now hold 53.85 as resistance.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Filling the outstanding gap above Thursday and closing back under 2.83 prevented buyers from gaining traction. Gapping down to 2.77 support Monday doesn”t help sellers to gain traction, although the session simply ranged choppily sideways. There is no compelling setup in this pattern.