Posts by Rod David
The First Trade & Pre-open Tour Recording… It’s Monday, so, bears.
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…
The ongoing series of intraday distribution remained alive and well going into Easter/Passover weekend. As did the ongoing series of gapping up. Thursday’s open was greeted near the end of a 22-point rally from overnight lows to 2911.75. Almost all of its 17-point retracement down to 2895.00 was done during the session’s first hour. Sellers failed 2-3 attempts to convert that retracement into a reversal, which told us to expect the drop’s recovery. And it was, to within 1 tick, while the afternoon ranged choppily sideways around 2910.00 into the close.
Overnight action’s new info…
Sunday’s open gapped down momentarily a little to 2907.50, then spiked up 5-points to probe fresh highs attacking 2916.00. Nice try. It was all errant ticks above the 2914.25 bias-up signal, which held its retest. A 13-point collapse down to 2901.00 suddenly found itself consolidating under Friday afternoon’s range. A bounce to 2907.50 has resolved back down to 2901.00.
If, then… (notes to accompany the Tour recording)
Two or three bearish setups are threatening to greet the open. The week’s final afternoon of choppy sideways ranging didn’t provide optimal confirmation to the bearish WedEX. Nor was it invalidated. Nevertheless, regardless of gapping up, trending down through the first half of Monday’s opening 15 minutes of volatility would get a benefit of the doubt for trending down aggressively through the balance of the morning. The downside would be helped by completing a bearish Globex-flip setup, after the overnight probe above Friday’s highs is rejected back under Sunday night’s 2907.50 earlier Globex low. And that could trigger the bias-down signal just 6 ticks lower. Meanwhile, recovering in time to avoid the Globex-flip, and any other of the bearish setups, could be as bullish as they otherwise would have been bearish — likely to probe higher highs, not only to Wednesday’s 2923.00 gap up, but also its room for noise up to 2926.50-2928.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2903.50 would be likely to trigger the 2906.00 bias-down signal at 10:15. Exiting the open above 2910.00 would be unlikely to trigger bias-down.
Look ahead: Economic Calendar – for Mon Apr 22, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The three-day holiday weekend ends with two econ reports, not necessarily high-profile and not reliable for influencing price action.
Chicago Fed National Activity Index
8:30 AM ET
Existing Home Sales
10:00 AM ET
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2910.75 | 2914.25 |
| …would target | 2917.25 | 2920.75 |
| Bias-down: under | 2902.50 | 2906.00 |
| …would target | 2896.75 | 2900.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| 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)
Intraday distribution remained alive and well going into Easter/Passover weekend. We wouldn’t know this, if not for optimism also being alive and well, repeatedly gapping up or rallying into big selling pressures. Thursday’s 22-point rally from overnight lows was retraced by 17 points not long after the session’s first hour.
But without even one reversal sustaining a lower low, there remains potential to probe yet higher highs. Wednesday’s 2923.00 gap up, and room for noise up to 2926.50-2928.00 don’t require being tested, but they are attractions so long as sellers haven’t retaken control.
Sellers failed to take control Thursday morning, and not for lack of trying, which told us to expect the drop’s recovery. Which it was, to within 1 tick at 2911.50. The window re-opened for sellers to try again, but they didn’t, as price ranged choppily sideways around 2910.00 into the close.
The week’s final afternoon didn’t provide optimal confirmation to the bearish WedEX. Neither was it invalidated, as price ranged sideways through the afternoon. Trending down through the first half of Monday’s opening 15 minutes of volatility would get a benefit of the doubt for trending down aggressively through the morning.
Have a very happy Easter and Passover… chaRTroom will re-open Sunday night at 6:00 ET.
Details and other markets coverage are discussed in the post-market Wrap recording here.
NO SATURDAY REVIEW THIS WEEKEND DUE TO THE HOLIDAY.
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 Jun Contract (EC, ETF: (FXE, UUP))
Despite having held 1.1340 support on Tuesday, Wednesday’s gap up didn’t extend higher. An overnight plunge to 1.1300 explained why. That was extended Thursday morning to attack 1.1280, which had been the original decline’s target. Resuming the rally requires closing back above 1.1320.
Gold Jun Contract (GC, ETF: (GLD))
Thursday’s slightly lower low at 1273.00 might extend, but it has fulfilled the minimum requirement for allowing a bottom or reversal to form. But not on the same day as a new low, so the nearest buy signal at 1293.50 won’t be lowered until Sunday night.
Silver May Contract (SI, ETF: (SLV))
Narrow ranging Thursday only flirted with the 15.00 buy signal, clearly inhibited by Gold’s flat-to-lower ranging at fresh lows.
30-year Treasury Jun Contract (US, ETF: (TLT))
Bouncing Wednesday morning off of a fresh low at 146-00 had closed flat, and that extended to 147-00 Thursday where another gap and “higher prior lows” provided resistance. Any initial weakness coming out of the weekend should complete the 145-24 pullback objective before a more durable recovery can be credible.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s weakness tested the adjusted 63.75 pullback limit, fluctuating around it intraday. The sell signal will be raised to 63.20 coming out of the weekend, but meanwhile the rally’s pullback should prove it has ended if the longstanding 65.00-67.00 target remains in-play.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Fulfilling the minimum required third lower close of Monday’s breakout did not equate to being a buy signal. In fact, it greeted Thursday’s EIA report from a position of weakness. And the pattern enters the weekend at fresh lows, its first in several weeks, all but requiring that Monday also probe a fresh low before a recovery can be credible.