Posts by Rod David
The First Trade… Greece-headline / ping-poing match resumes.
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…
Retracing Wednesday night”s rally to 2112.75 into Thursday”s open didn”t prevent gapping up above Wednesday afternoon”s 2105.50 high. But it wasn”t maintained, which turned a potential “session-long rally” setup into a “session-long decline.” The very last minutes probed fresh lows down to 2092.00.
Overnight action”s new info…
Fresh lows were probed down to 2090.50 while China”s Shanghai Composite (SHCOMP) resumed plunging. That was relatively shallow (as have been all other reactions to SHCOMP plunges, ever since the first reaction was realized not to have any bearing on western valuations). It was easily recovered back above 2092.00 ahead of Europe”s opens, but only to range sideways up to 2095.00. Very recently, Greece headlines suggesting an offer by creditors have triggered a rally now testing yesterday”s last hour high at 2098.50.
If, then…
Is this pre-open rally any more durable than yesterday”s? Two contextual signals suggest not. First, session-longs like yesterday”s session-long decline tend to resume their influence through the following morning. Second, Wednesday morning”s break already triggered a downleg projected to last through Friday morning. Either influence can be negated by triggering bias-up. Otherwise, fresh lows this morning remain likely.
First Trade…
Exiting the open at 9:45 above 2098.50 would be likely also to trigger the 2096.75 bias-up signal 30 minutes later at 10:15. Touching 2099.25 during the open would require its recovery, too. Exiting the open under 2094.00 would be unlikely to trigger bias-up.
Thursday”s late dip probed fresh
Thursday”s late dip probed fresh session lows. That left only one timing window not to probe its prior timing window”s low. And that qualifies Thursday as a “session-long decline.” Session-longs tend to extend through the following morning. That”s in-line with Wednesday morning”s signal for trending down through Friday morning.
Being a more recent signal and independent of Wednesday”s signal, NOT probing lower Friday morning would require significant bullish sponsorship. Not just an overnight rally or an opening bounce — either of these can resolve down to fresh lows — but actually triggering bias-up would be credible for extending higher. A lot higher.
Absent such meaningful strength, the question for Friday morning is how deep? There”s a lot of calculable support and a gap just 4 points lower at 2089. There”s a bigger attraction at 2084 down to 2082.50. Whichever, greeting the afternoon without yet rallying could extend the drop much more steeply into the close.
Here”s more detail in the post-market Wrap:
https://roddavid10.mitel-nhwc.com/join/pcrwwsp
Tonight”s chaRTroom links:
XP-Friendly: https://www.anymeeting.com/098-182-551
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2105.00 | 2096.75 |
| …would target | 2113.75 | 2105.50 |
| Bias-down: under | 2099.50 | 2091.25 |
| …would target | 2094.75 | 2086.50 |
| Signal status: LATE BIAS-UP, 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… Laid back sellers.
Creeping lower, but barely trending.
The 2101.50 bias-down signal was still being overlapped both at 1:20 and at 1:30 to avoid triggering. The noN-bias environment didn”t require fulfilling the 2096.00 bias-down target. But it was tested anyway, on the way to 2092.50. Now a 6-point bounce is trying to hold above 2096.00.
It”s negative territory, but not by very much. And sellers aren”t gaining traction for today”s efforts — the bias environment exit was under the noon hour”s low, but the final hour”s entry wasn”t under the bias environment”s low, and the 3:10-3:20 timing window didn”t trend down, either.
So far, it seems that trending down through Friday morning is being attacked with the least necessary effort.
Let”s see what the position squaring window does before drawing a conclusion. It”s opening now at 3:37. The session”s final timing window — last 60-90 minutes — has yet to probe under a prior timing window”s low. It will, if this is a session-long decline session. And it will be vulnerable to ticking down into the close.
Closing above 2099.25 would be the only bullish development possible today, and the trend otherwise remains down.
Daily Spot… Naturally gassed up.
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))
The 1.1250-1.1275 bounce limit was shallow, but overnight firming was shallower. Thursday”s intraday high was even shallower. That”s pessimism and it suggests that a bigger bounce may be necessary before a deeper drop can begin. Dropping before another bounce should be short-lived.
Gold Aug Contract (GC, ETF: (GLD))
Very narrow ranging Thursday avoided rejecting Wednesday”s close under its prior low. Fresh lows remain likely, targeting 1158.50.
Silver Jul Contract (SI, ETF: (SLV))
Very narrow ranging continued to undermine the momentum of Tuesday”s break lower, while not reversing it. A fresh low is possible, but not yet likely to extend.
30-year Treasury Sep Contract (US, ETF: (TLT))
Closing above Monday”s 149-24 close Wednesday only suggested that sellers were done, but closing above 150-08 is still needed to signal momentum has reversed back up. Thursday”s choppy inside day can”t afford to delay rallying early morning, or else fresh lows become likely.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down a little and ranging narrowly Thursday didn”t reject Wednesday”s close back under 60.70 support. The pattern isn”t distributive, so I don”t have a sell trigger, but probing fresh lows is likely if Friday”s open isn”t almost immediately rejecting and recovering the two-day dip.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Gapping up Thursday extended to 2.83 ahead of the EIA report. Its reaction down attacked 2.77 to within 1 cent before reversing back up to fresh session highs testing 2.85. Pullbacks must hold 2.83 to maintain the rally”s momentum, which still needs a second consecutive higher close Friday to confirm.