Posts by Rod David
The First Trade… Focusing on more Greece talks.
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…
Wednesday”s first hour had held the critical 2113.50 level, but a late surge from there only stretched the rubber band so it could snap back down. Hard. A sell signal triggered under 2112.75 and every bounce limit held as every timing window trended down on the way to 2101.50. Oversold RSIs during the afternoon bias environment waited for a bounce to stretch the rubber band again, snapping back down through the close to test 2099.25 support.
Overnight action”s new info…
The Globex open immediately began rallying into a 2102.00-2104.50 range while awaiting Europe”s opens. That resumed the rally, which eventually surged for its last 5-6 points up to 2112.75. Its reaction down to 2105.00 tried to resume the rally on a very favorable Greece headline. That stopped short of a fresh high when a customarily contradictory headline followed it. The headlines have only gotten worse, but so far the range is holding.
If, then…
Actually, the attempt to resume rallying stopped pessimistically short of touching the 2112.75 high. And that high had stopped pessimistically short of touching the critical 2113.50 level. Monday and Tuesday”s lows at or above 2112.00 were touched, so relevant resistance has been touched. If a rally can”t exploit having chipped away at resistance, the resolution could be that much more bearish. And since yesterday”s break under Monday and Tuesday”s lows signaled a drop underway through Friday morning, gapping up back above the prior lows could reject that setup and put into play new highs.
First Trade…
Exiting the open at 9:45 above 2107.50 would be likely also to trigger the 2105.75 bias-up signal at the 10:15 bias timing window 30 minutes later. Exiting the open under 2102.25 would be unlikely to trigger bias-up. Exiting the open above 2113.50 would be likely also to exceed the 2110.50 bias-up target at 10:15 to renew the bias-up signal.
Wednesday”s last intraday updated pointed
Wednesday”s last intraday updated pointed out that the bounce testing 2105 was likely to resolve down to new lows. The pattern it was in wasn”t accumulative. And oversold RSIs at the pattern”s 2101.50 low required a retest. (The low also required a retest since its pivotal low had been touched.)
In fact, the bounce resolved down to new lows at 2099 through the cash session close. One of the two potential paths higher Thursday was somewhat neutralized, since it required exiting the bias environment above 2105.50 after testing 2099.25 intraday. Now 2099.25 has been tested, so only one path higher remains, gapping above 2105.50.
That would actually form a “session-long rally” setup. Maintaining a gap up above 2105.50 would be enough to shift the burden of proof to sellers. Currently, despite there being no “unfinished business below,” that burden of proof is on buyers. Breaking under Mon-Tue lows and 2113.50 suggests extending down through Friday morning.
Details and more can be found in the post-market Wrap recording:
https://roddavid10.mitel-nhwc.com/join/jrcrmht
Tonight”s chaRTroom links:
XP-Friendly: https://www.anymeeting.com/860-954-585
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Morning bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2113.75 | 2105.75 |
| …would target | 2118.50 | 2110.50 |
| Bias-down: under | 2105.50 | 2097.50 |
| …would target | 2099.50 | 2091.50 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP 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… Quick dip, or long trip?
Hovering optimistically above the lows
Low after low today took RSIs oversold, dooming each bounce to failure as the low”s retest was required. The current 2101.25 low is no exception. Oversold RSIs there require its retest. Despite retracing all but 1 tick of its reaction up to 2105.50, the 2101.25 low requires a retest.
And that”s despite another reaction up now testing 2105.00.
Back under 2103.25 (being tested now) would target 2097.25. It”s too late for sellers to gain traction for their effort, since only the bias environment”s exit was bearish while the final hour”s entry was not. So, probing fresh lows today — potentially down to 2097.25 — could make fully expended sellers prone.
Bouncing any higher into the close is possible, but the ranging at session lows is not accumulative. Back above 2106.00 could test 2109.00 while only refueling sellers for a deeper drop tomorrow.
Having failed to bounce this morning or to hold 2113.50 support, trending down through Friday morning is now the premise. Thursday has two paths to recovering, which we”ll discuss during the post-market Wrap.
Daily Spot… Crude Oil is testing its resolve.
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))
After Tuesday”s gap down went on to only range sideways intraday, not gapping down Wednesday made the decline unlikely to extend. And, therefore, unlikely to confirm Tuesday”s break. Bounce potential to 1.1250-1.1275 can be probed intraday, but must hold through the close to maintain the near-term downward momentum.
Gold Aug Contract (GC, ETF: (GLD))
Tuesday”s confirmation of Monday”s breakout already fulfilled its minimum third lower close Wednesday. Bouncing from 1168.00 closed under the week-old prior low to trigger another pattern whose objective is 1162.00, while the bigger picture still targets 1158.50.
Silver Jul Contract (SI, ETF: (SLV))
As was expected, Wednesday avoided a lower close that would have confirmed Tuesday”s breakout. That doesn”t reverse the trend up, nor does it preclude probing lower lows, but it helps to avoid participating in Gold”s deeper decline.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping up Wednesday helped to confirm that Tuesday”s late dip back toward 148-20 was only noise. Reacting down was recovered into the afternoon, back above Monday”s 149-24 close to start signaling the downleg from Friday”s high had ended. Closing back above 150-08 would signal another rally leg underway.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday night”s fresh high testing 61.55 was retraced to test 60.70 support into Wednesday”s open. Wednesday morning”s bounce back to 61.50 was reversed down to fresh lows at 59.80. Closing under 60.70 must be recovered by noon Thursday to maintain the potential upside momentum.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Flat-to-higher ranging Wednesday tested the 2.77 buy signal but didn”t trigger it, greeting Thursday”s EIA report from a position of weakness. Closing Thursday above 2.77 — and preferably also above 2.83 — would be the minimum requirement to suggest momentum is reversing up.