Posts by Rod David
The First Trade & Pre-open Tour Recording… Not so fast.
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…
Sunday night’s rally actually started after midnight. Its first rally, which got up to 2729.50 before retracing back down to its 2720.00 origin. The second rally extended through the open up to 2733.25 before reacting back down even lower to 2717.00, perhaps in sympathy with the NDX collapse. Two overwhelming reactions weren’t enough to prevent a third rally from briefly probing a fresh session high during the morning’s bias environment. That one wasn’t reversed, but waited to extend higher until the afternoon bias environment attacked 2744.00. “Unfinished business” was left outstanding by the morning’s bias parameters at 2709.50.
Overnight action’s new info…
For all of yesterday’s choppiness, the market is almost right back where it started. Having ranged sideways since Monday afternoon’s bias environment began lapsing, Globex gradually crept higher to attack 2746.00. A shallow dip was recovered to retest 2746.00 in time for its reaction to begin sliding into and out of Europe’s opens. That slide has retraced to within 1 tick of Sunday night’s first failed that got to 2729.50.
If, then… (notes to accompany the Tour recording)
The door is open to rejecting all of yesterday afternoon’s rally by gapping down to and or through 2731.00-2733. Which is currently being threatened. Also being threatened is a Globex-flip, after having probed above yesterday’s highs and now indicated to open under the 2738.00 earlier Globex low. The setup’s likely objective would be “unfinished business” at 2709.50. Forming the setup without triggering it could be as bullish as it would have been bearish. So, exiting the open back above the 2738.00 earlier Globex low would reinstate yesterday’s rally. It had fallen short of closing above 2743.00, which would have put into play 2748.00. But that would be back in-play, and probably also Friday’s opening gap back up to 2751.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2739.25 would be unlikely to trigger the 2734.50 bias-down signal at 10:15. Exiting the open under 2730.00 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2742.75 | 2743.25 |
| …would target | 2750.25 | 2750.75 |
| Bias-down: under | 2734.00 | 2734.50 |
| …would target | 2727.00 | 2727.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | . | |
| 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)
The overnight rally didn’t start so late that it would be doomed to failure. But the open’s 11-point gain up to 2733.00 was reversed into negative territory at 2717.00. That leg’s timing should have doomed any other bounce to failure. But the NDX collapse that influenced it was waning, and soon another rally was probing the open’s high.
The bias environment wasn’t exited high enough to invalidate its “unfinished business” below at 2709.50. Which tells us that the interim rally is counter-trend. But it doesn’t tell us where the counter-trend rally will peak. The obvious attraction is Friday’s 2751.00 gap up above all prior highs, but that’s not necessarily where the next downleg begins.
Already, Monday afternoon’s bias environment has rallied to attack 2744.00. Overbought RSIs there require a retest, and the next higher attraction is 2748.00. Putting 2709.50 back into play first would require gapping down Tuesday back under 2731.00-2733.00.
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))
Friday’s reversal from fresh bounce highs back into negative territory tried extending deeper Sunday night to trigger the 1.1400 sell signal, but only to bounce Monday. Friday’s 1.1475 gap up could be tested before suggesting any greater upside.
Gold Dec Contract (GC, ETF: (GLD))
Flat-to-lower ranging at or around the 1228.50 sell signal into Monday’s open, and any lower close would be credible for extending down without delay.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s break under the 14.70 sell signal fell to prior support at 14.60, where a bounce up to 14.70 was retraced to attack 14.60. A second consecutive lower close Tuesday would confirm another downleg attempt underway.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping up and firming slightly Monday avoided extending lower, which helps to consider Friday’s drop as being an isolated temporary reaction to the Employment Situation report, and not necessarily disengaging from the recent inverse correlation to stocks.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s fresh lows attacking 62.50 were recovered in time to isolate the probe under the 63.20 pullback limit, allowing a recovery to form if triggered above 64,65, and confirmed without delay Tuesday.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Repeatedly testing the 3.25 buy signal last week never extended higher into the weekend. But holding the 3.17 pullback limit Friday morning and recovering to close again above 3.25 was rewarded Sunday night, compensating for the delay by gapping up above all prior highs to 3.50-3.57. Pullbacks have room down to 3,36-3,42 while maintaining upside momentum.
Mid-day Update… Which way is up?
PROGRAMMING NOTE: Market Wrap will begin early at 3:15 ET.
The overnight rally above 2720.00 to 2729.50 had been entirely retraced, and then recovered into and out of the open. Its 2733.25 post-open peak was reversed sharply down to 2717.00. Bias-up was rejected, triggering no-bias, putting into play an offsetting test of the bias-up signal.
And that was just the first hour.
The next half-hour rallied. Also sharply, and also entirely retracing a fresh high at 2734.25. It was too late to trigger bias-up, and too late for recovering the bias-up signal to invalidate the no-bias. The morning’s offsetting test of its 2709.50 bias-down signal has become “unfinished business.”
But that was 2-1/2 hours ago.
The market has been ranging choppily sideways back down to 2724.00. Neither of this afternoon’s bias signals was tested or even attacked. There’s room up to this afternoon’s 2737.75 bias-up signal, or down to its 2720.75 bias-down signal… until the bias environment begins lapsing.