Posts by Rod David
The First Trade… Confirmation’s moment of proof.
Proper context can start the day with a solid win and make all the difference.
Enter the chaRTroom here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
The prior high”s retest that began Monday finally broke higher Thursday. But not before one more failed rally required a recovery. That was the morning”s post-open surge to its 2081.25 bias-up signal, which was retraced to its 2069.00 and 2067.00 objectives as “no-bias trending.” The balance of the session rallied 20 points to a fresh high at 2087.00, barely gaining traction for the effort.
Overnight action”s new info…
Sideways ranging between 2083.00-2087.00 only recently began probing higher. It”s not a “new Globex trend extreme,” but there is complexity at 2089.50 and now 2090.50.
If, then…
Yesterday”s rally gained traction only after the bias environment”s exit. Its sponsorship is not the strongest hands. Gapping down today under yesterday afternoon”s lows could have invalidated it, but that now seems unlikely. Gapping up would be vulnerable if its immediate reaction down were not quickly absorbed. This being a Friday, the morning”s bias signal tends to persist through the noon hour. So, triggering bias-up or not can be the difference between extending the rally intraday or else dropping back into the week”s range… By the way, closing higher today would confirm yesterday”s breakout. As bullish as that could be near-term, it is the reason why today”s early momentum can”t yet be taken for granted.
First Trade…
Exiting the open at 9:45 above 2090.75 would be likely also to trigger the 2089.00 bias-up signal at 10:15. Exiting the open under 2083.50 would be unlikely to trigger bias-up.
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2096.00 | 2089.00 |
| …would target | 2102.00 | 2095.00 |
| Bias-down: under | 2086.25 | 2079.25 |
| …would target | 2081.75 | 2074.75 |
| Signal status: noN-BIAS, STILL TESTING 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.
Careful what you ask for…
Careful what you ask for… Thursday”s late-afternoon breakout did almost everything it could to be credible. The final hour was entered above the bias environment”s high, and the 3:10-3:20 timing window trended higher. Exiting the bias environment above the noon hour”s high would have been more credible, and it”s the only reason that the 3:10-3:20 timing window”s behavior is even relevant.
Regardless, price definitely rallied to fresh relative highs. Buyers were due some sort of reward for 3-1/2 sessions of recovering drop after drop, and any further delay would conditioned them not to bother defending against the next drop. The recovery from last Friday”s payrolls drop to retest last week”s high should deserve extending to the prior highs.
So, almost everything possible by Thursday”s close was done to confirm buyers are the stronger hands. Having gained traction, the rally can afford an opening dip back into the afternoon”s range to test 2077.50. But one thing can still undermine extending higher which is to gap open under Thursday afternoon”s 2075.25 low.
REMINDER: TRAINING SESSION TONIGHT
AT 6PM ET IN THE CHARTROOM AT
https://roddavid10.mitel-nhwc.com/join/bfyytsh
Here”s the link to Thursday”s post-market Wrap:
https://roddavid10.mitel-nhwc.com/join/bwzzhpm
Pre-close view… noN means noN.
noN-bias environment is lapsing, leaving a vacuum.
This afternoon”s 2077.50 bias-up signal was touched within 3 minutes of 1:20 to invoke the grace period. It was still being touched at 1:30 to avoid triggering bias-up or no-bias.
The bias-up target wasn”t put into play, and the bias-up signal wasn”t required to hold. The bias parameters became irrelevant. It was a noN-bias.
Often, the tested bias signal will hold, anyway, during a non-bias environment. As did 2077.50. Then a surge probed above it as the bias environment began lapsing.
And now a fresh high is being probed up to 2080.50 at the final hour”s entry. The bias environment exit was still within the noon hour”s range. So, trending higher through the 3:10-3:20 window is needed to confirm a durable breakout is underway.
Daily Spot… Bearish bond pattern breaks lower
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 Mar Contract (EC, ETF: (FXE, UUP))
Wednesday night”s slide into Thursday”s gap down tested uptrending support at 1.0750. It wasn”t acknowledged as price slid lower to 1.0650, fulfilling the minimum third lower close outstanding from the confirmed breakout coming out of March. Having refueled sellers with the high”s retest, extending lower to 1.0590 before bouncing would not be surprising.
Gold Jun Contract (GC, ETF: (GLD))
The pullback extended lower Wednesday night and Thursday morning, testing the original 1194.00 buy signal, which was still being tested through the afternoon. There is no bullish excuse for further delaying the rally”s resumption, which should be aggressive, and triggered as low as 1205.00.
Silver May Contract (SI, ETF: (SLV))
Wednesday”s drop under the original 16.45-16.60 pullback limit wasn”t rejected immediately Thursday, and instead probed lower, potentially targeting 16.05.
30-year Treasury Jun Contract (US, ETF: (TLT))
Any rejection of Wednesday”s return to 164-30 resistance had to be done aggressively if it were to be credible. Thursday”s dip back to the 163-18 low — and then through it after a disappointing 30-year auction — did extend down at a steeper pace that easily qualifies the characterization. The bearish pattern remains on-track.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday”s drop may be likely to recover and resume the rally, but it was too sizable to try recovering too quickly. In fact, Wednesday night”s bounce to 51.90 fell back to 50.60, as did a slightly higher high to 52.05 intraday. It”s still premature to resume rallying, but a slightly lower low Friday morning could be compelling for long-entry before the weekend”s geopolitical risk premium is added.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Thursday”s EIA report wasn”t being greeted from a position of strength, but it wasn”t necessarily weakness. In either case, the reaction did probe fresh lows, and close lower. There is no active signal.