Posts by Rod David
The First Trade & Pre-open Tour Recording… Flat-to-lower.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Wednesday night’s multiple double-digit swings were nonetheless contained within the late-afternoon range. A breakout attempt occurred within 30-60-90 minutes of Thursday’s open, which is our Globex range late breakout setup. Waiting so long to both breaking the overnight range tends to be false. Which it was, reversing back into and through the wide overnight range. Not before the false breakout could be very productive, probing under Wednesday’s 2686.25 low to attack 2671.00. Its recovery back up to 2711.00 was corrected during the noon hour, then recovered further to enter the afternoon bias environment above the 2717.00 overnight high. Ultimately, the recovery extended to attack 2737.00 into the bias environment exit, which was retested after dipping to 2711.00.
Overnight action’s new info…
A relatively narrow 9-point range between 2722.50-2731.50 persisted through Europe’s opens, before finally breaking one way or the other. That eventual break is lower, attacking 2714.00, under this morning’s 2717.75 bias-down target. It’s more than 61.8% beyond the earlier overnight range, but only now challenging the lower-end of yesterday afternoon’s range.
If, then… (notes to accompany the Tour recording)
A second consecutive lower close Thursday would have confirmed Wednesday’s preliminary signal that the trend was extending down. The rejection can be as bullish as it would have been bearish. But the setup offers only a narrow window to leverage the trapped sellers into attracting strong-handed buyers that actually reverse the trend up. More so today, because the bearish WedEX is scheduled to influence this afternoon’s price action. Not already rallying this morning would make that afternoon influence capable of resuming the week-old decline. Extending the rally up to a more defensible position can’t afford to wait too long before beginning.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2719.00 would be likely at least to trigger the 2724.75 bias-down signal at 10:15. Exiting the open above 2726.00 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2737.00 | 2738.25 |
| …would target | 2744.25 | 2745.50 |
| Bias-down: under | 2723.75 | 2724.75 |
| …would target | 2716.75 | 2717.75 |
| Signal status: NO-BIAS, TESTED BOTH BIAS-DOWN PARAMETERS | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Is that a bottom? Not yet. Possibly not at all. But possibly.
Thursday’s open was greeted by one of our setups, as a very late breakout had just left the overnight range. 
The overnight range’s wide double-digit swing might not have resembled a range, but it was had developed exclusively within Wednesday afternoon’s late range. And finally breaking beyond it within 30-60-90 minutes of the open tends to be false.
Like the overnight range, the false breakout was very productive. Wednesday’s attack on the decline’s 2685.00-2686.00 objective was probed by an attack on 2671.00. Which reacted back up to 2711.00. Its noon hour correction could have become another downleg, but held to resume the recovery attacking 2737.00.
Wednesday had closed under the pre-election pullback’s low. A second consecutive lower close would have confirmed the trend extending down. There is a narrow window to leveraged that failed attempt into signaling the week-long pullback is reversing up. Which must become obvious Friday morning if the afternoon’s bearish WedEX influence can be absorbed,
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot…
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 Dec Contract (EC, ETF: (FXE, UUP))
Gapping down Thursday bounced before even touching Wednesday’s low, essentially forming an inside day. A fresh high would still contend with 1.1400 resistance, but retesting the 1.1245-1.1275 lows first could form a durable bottom.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s close was testing 1210.00 on its way up to 1217.00, which was retested overnight but not exceeded Thursday as price hovered just below it Resistance at 1219.00-1222.00 must hold to maintain this is only a temporary corrective bounce.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s bounce extended overnight up to the 14.25 resistance of Friday’s gap down and previous “higher prior lows.” It was all retraced into the open, and then recovered intraday to probe another nickel higher. Resistance at 14.35 is likely to be tested, and likely to launch the next downleg if tested.
30-year Treasury Dec Contract (US, ETF: (TLT))
Rising stocks didn’t need the destination of a flight-to-quality, so probing higher Thursday up to 139-14 was retraced into negative territory. The trend didn’t reverse down, but the opportunity to confirm Wednesday’s rally had failed.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s close didn’t maintain a shallow but favorable knee-jerk reaction to the one-day delayed EIA report, essentially ending the day at its 56.50 open and still being likely to probe under Monday’s 54.75-55.55 lows.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
A probe above Wednesday’s 4.93 spike high was avoided before reversing down sharply to 3.93 Thursday. Which still confirms the exhaustive nature of the rally, but held above the 4.03 “lower prior high” to avoid reversing the trend down.
Mid-day Update… Bottom, or bounce?
Buyers leveraging the trapped shorts.
This morning’s bias-down signal triggered despite having been recovered from testing its bias-down target. 
So, the bias-down target’s retest was put into play, producing fresh lows down to 2671.25. And producing the opportunity for a second consecutive close under prior lows that would put into play the next lower objective.
That disappeared in a hurry. The bias environment lapsed just above its 2691.25 bias-down signal, isolating the interim probe under prior lows. Either it was another temporary corrective bounce, or else sellers were done.
It does seem that they were done.
Extending higher into the noon hour peaked at 2710.00 before dipping back down to 2691.50 (1 tick short of the morning’s bias-down signal). The afternoon’s 2695.50 bias-down signal’s test was recovered in time not only to avoid triggering it, but also in time to test the 2711.00 bias-up signal. Which triggered.
Its 2718.00 bias-up target is being exceeded up to what would have been the 2729.00 renewed bias-up target at 2729.00. This is the sort of pattern — failed attempt to confirm the downtrend — that can be rewarded by a relentless intraday rally. The 2760.00 area isn’t necessarily in-play, but its test wouldn’t be surprising so long as another drop doesn’t break back under 2711.00.