Posts by Rod David
The First Trade… Expiring up?
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…
Thursday”s 7-point gap up to Wednesday”s 2098.75 high quickly extended higher. The air pocket located above 2101.00 triggered a surge that extended higher through the noon hour to 2119.00. A reaction down to 2110.00 was largely retraced as the afternoon ranged choppily into the close… Thursday”s gap up served by proxy to trigger a late active bullish WedEX signal.
Overnight action”s new info…
Ranging between 2111.00-2114.00 narrowed into Europe”s opens, which launched a climb to 2117.75. Price action since then has been narrowing around this morning”s 2116.25 bias-up signal.
If, then…
WedEX is a Friday afternoon influence, so it doesn”t require the morning to trend up. This being an expiration session, trending through the opening 15 minutes is likely to trend in that direction throughout the day. Regardless, there”s no bullish reason to probe back under yesterday afternoon”s lows.
First Trade…
Exiting the open at 9:45 above 2118.00 would be likely also to trigger the 2116.25 bias-up signal at 10:15. Exiting the open under 2111.75 would be unlikely to trigger bias-up.
Thursday”s mid-day reaction down was
Thursday”s mid-day reaction down was largely recovered, but the rally barely resumed. Blipping-up during the noon hour to test ?2119 had reversed down to ?2110 as the bias environment began. The next hour firmed to ?2114 and the following hour firmed further to test ?2116.
That”s almost 7 points up from the pullback”s low, but still 2-1/2 points under the high. The reaction down was absorbed, but the rally didn”t attract new sponsorship. The final half-hour settled around 2113.
2113 was the last relative prior high which had launched the decline into last week”s lows. Still overlapping it at Thursday”s close prevents labeling the day as a breakout. Meanwhile, buyers gained no traction for their efforts, since only the final hour”s entry recovered a relevant level.
So, expiration isn”t being greeted from a position of strength. Only closing at new highs would constitute a breakout now. That door is open, since Thursday”s gap up served by proxy to trigger a late bullish WedEX. But the signal”s upward bias applies to Friday afternoon, and doesn”t preclude dipping first to 2105.50.
Here”s more detail in the post-market Wrap recording:
https://roddavid10.mitel-nhwc.com/join/wzjbctv
[Links to view overnight action will be added to this post”s comments section in the Activity Feed]
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2124.50 | 2116.25 |
| …would target | 2130.00 | 2122.00 |
| Bias-down: under | 2117.50 | 2109.50 |
| …would target | 2112.50 | 2104.25 |
| Signal status: LATE 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.
Daily Spot… Gold’s gap, out of line but hard to fade
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 SepContract (EC, ETF: (FXE, UUP))
Fulfilling the outstanding requirement for a third higher close Wednesday helped to trigger an Ascending Triangle pattern that had formed. Extending higher Thursday tried confirming Wednesday”s breakout with a second consecutive higher close, which would require another eventual third higher close. Regardless of the confirmation, just having gapped up Thursday above all prior highs does undermine an immediate reversal attempt.
Gold Aug Contract (GC, ETF: (GLD))
While awaiting a break under the 1175.00 sell signal, two big bounces held their maximum limits. But Wednesday”s post-close surge in reaction to the FOMC statement extended sharply higher overnight to test 1999.00-1204.00 where the early-Jun surge peaked. This retest may be as temporary, and back under 1197.00 would reverse momentum down.
Silver Jul Contract (SI, ETF: (SLV))
Reacting higher Wednesday to the FOMC statement extended higher overnight to test the upper-end of the 16.15-16.35 resistance range. Reacting down sharply to the range”s lower-end can”t afford to close any lower, or else new lows would be in-play.
30-year Treasury Sep Contract (US, ETF: (TLT))
Bouncing Wednesday from only attacking it 149-16 pullback objective had undermined the recovery attempt. Extending the bounce overnight to 151-29 still reversed down Thursday to thoroughly test 149-16 by another quarter-point. Closing back above 150-10 would resume the rally.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward from Jul to Aug which is at a 40-cent premium] A failed overnight rally had tested the 61.20 buy signal. Bouncing into Thursday”s open spent the session ranging narrowly flat-to-higher around 60.70 resistance. There is no new setup to initially target 63.55.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday”s EIA report was greeted from a position of strength above prior lows and having probed fresh highs. The knee-jerk reaction from 2.83 support up to 2.88 reacted down anyway to test 2.77 support. Back above 2.83 would signal the rally resuming.
Fill in the blank: Buy on the rumor, _______.
Was it even rumored that Greece might avoid defaulting to IMF?
German press is reporting that the EU and ECB will extend aid to Greece without the IMF. This is particularly timely, since this seemingly rebuts the headlines that had triggered the drop from last Thursday”s opening high.
I wasn”t aware of any rumors to this effect, although price patterns continued to suggest that Grexit hasn”t yet come to a head. This morning”s rally up to 2115.00 had consolidated narrowly down to 2112.50 when the Grexit headline triggered a surge to 2119.25. That surge has been retraced entirely.
This afternoon”s 2116.25 bias-up signal didn”t trigger, which allows room back down to this afternoon”s 2109.50 bias-down signal. That was just attacked to within 2 ticks. Breaking under it through 1:30 would invalidate the no-bias range”s limitation.
Session-long rally update: The setup wasn”t optimal, but we”re tracking its template anyway. If this afternoon”s bias environment is the window that does not probe a prior high, then the final hour should resume the rally. Again, the setup isn”t optimal, so we may still consider sell signals when the afternoon”s bias environment has lapsed.