Posts by Rod David
Morning bias
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| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2105.75 | 2097.75 |
| …would target | 2111.25 | 2103.25 |
| Bias-down: under | 2095.75 | 2087.75 |
| …would target | 2089.75 | 2081.75 |
| Signal status:LATE BIAS-DOWN, BIAS-DOWN TARGET MET | 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.
2061.50. This represented the room
2061.50. This represented the room for noise above Wednesday morning”s bias-down signal. I was skeptical of the morning”s recovery attempts, and 2061.50 was the most buying pressure allowable as just a correction. It was tested repeatedly before finally launching a 9-point slide to probe under Tuesday”s low. It should have a chance to be influential when tested as support, but the FOMC reaction sliced through it.
It”s chance to be influential as support shouldn”t be too far away. Post-FOMC reactions tend to be retraced entirely within one week. First things, first. Overbought RSIs at Wednesday”s 2099.75 high require its retest, and neutralizing its attraction overnight could suffice for starting a retracement. Otherwise, almost any higher post-open high would all but assure new highs on this leg.
WedEX was of course actively bullish, signaling an upward bias into and out of the weekend. Wednesday”s outsized rally does require confirmation through Thursday”s open, or else the signal will become at risk of inverting. We”ll address that in real-time if needed.
Here”s the recording Wednesday”s post-market Wrap:
https://roddavid10.mitel-nhwc.com/join/kfphkcs
And don”t forget about Thursday night”s Training Session #3:
http://marketfy.com/product/rod-davids-futures-market-timing/blog/1176/view/74986/
Pre-close view
No more patience, indeed.
FOMC wasn”t greeted from a position of strength, but it was bouncing from a test of 2053.25 support. The news triggered a surge to 2081.25, and that”s where my first buy signal could be calculated.
Each asterisk on the accompanying chart identifies the buy signal”s target. Notice how the market increases its daring with each one — reacting down on the first target”s first tick (1), probing the next target for 2 minutes before retracing the signal entirely (2), and after a third fresh high formed a “close-quarters double top” (3), the next target was acknowledged only momentarily (4) on the way to the overall pattern”s maximum potential (5).
(1) 2076.25 – 2082.50 — 6.25 points
(2) 2081.25 – 2085.25 — 4 points
(3) 2085.75 – 2087.25 — pullback limit violated
(4) 2087.50 – 2095.50 — 8 points
(5) extended another 4 points to 2099.75
RSIs were borderline overbought at the high. At the low, too. In this volatility and range, only clearer probes would create the requirement for a retest. Regardless, don”t forget that usually any post-FOMC trending will have been retraced within a week.
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 Mar Contract (EC, ETF: (FXE, UUP))
Tuesday”s low had filled the gap down to Monday”s close, neutralizing its attraction. But the upside never triggered momentum extending higher above 1.0650. The reaction to Wednesday”s FOMC took care of that, surging to attack the 1.0855 target.
Gold Apr Contract (GC, ETF: (GLD))
Wednesday”s close was above 1148.00, but still short of the 1154.00 buy signal. That didn”t prevent the FOMC reaction from surging sharply to 1172.50. Its reaction down tested 1161.00, which must hold to maintain the reversal.
Silver May Contract (SI, ETF: (SLV))
Early weakness Wednesday still avoided probing under last week”s low, holding above Thursday”s gap that had been filled already. The FOMC reaction surged above the past week”s highs up to 16.00 and put into play a test of 16.30 so long as 15.65 now holds as support.
30-year Treasury Jun Contract (US, ETF: (TLT))
Room for a pullback down to 161-00 was tested to within a quarter-point prior to Wednesday afternoon”s FOMC news. The reaction surged to fresh highs at 163-01, now needing to hols 162-14 as support to maintain the rally”s momentum targeting 164-25.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows overnight extended into Wednesday”s session down to within a nickel of 42.00.. Narrow ranging reacted up sharply to within a nickel of 45.00 in reaction to the FOMC news. That tested the 44.30 buy signal, which would be confirmed by a second consecutive higher close Thursday, and meanwhile suspicious.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Tuesday”s first close above the 2.84 confirmation could have tested 2.77 support, but instead extended higher already to fresh relative highs at 2.94. Impatient optimism behind the improvement does keep the door open to a negative knee-jerk reaction down. But consecutive higher closes above resistance suggests that Thursday”s EIA report is being greeted from a position of strength, which would be likely to recover and resume the rally.
Last-minute update before FOMC
This afternoon”s drop has proved out my skepticism of the upside potential ahead of the FOMC events. The pre-open and post-open impatient optimism around yesterday”s 2056.25 low was bearish from a contrarian perspective. Tests of 2061.50 held, and ultimately reversed down into the noon hour and through it. Now fresh lows have been probed down to 2052.25.
And the announcement is 15 minutes away.
Testing this area and already recovering above a prior high by now would have greeted the news from a position of strength. Recovering this area from having tested 2048.00-2048.75 would have sufficed. It”s too late for that, too.
If anything, the news is being greeted from a position of weakness. But that”s a little too late to be reliably bearish.
Like the open, this afternoon”s environment will be inappropriate for less aggressive traders. Aggressive tactics apply.