Posts by Rod David
Post-open Review… Detour rewarded.
Opening reversal attempt’s failure launches surge.
Probing yesterday’s high and then opening back under the earlier Globex low would have formed a bearish Globex-flip setup. But overnight action never probed yesterday’s high. Never came close.
We gave the setup a benefit of the doubt anyway. A quasi-Globex-flip. Yesterday’s 2707.00 high was so much higher after the afternoon plunge to 2603.00 and closing at 2643.00, 
and overnight action was still substantial up to 2663.00.
And the 2636.25 earlier Globex low was being tested at the open. Interestingly, it was tested down to this morning’s 2633.50 bias-down signal.
The open’s test of the 2636.25 earlier Globex low held. Well before the opening 15 minutes of volatility had lapsed, it was clearly holding. So, we assumed it wouldn’t trigger. And we assumed what we would have assumed even if not a quasi-Globex-flip setup, that the resolution would be as bullish as the setup would have been bearish.
And the first half-hour tested 2675.00. Interestingly, the 2667.25 bias-up target was still being tested at 10:15 to avoid renewing the bias-up signal.
Being a bias-up environment, there is room down to its 2652.00 bias-up signal. Probing under it during the bias-up window, or until coming within view of it lapsing, requires being retraced, and is just generally more difficult to extend down. Probing it down to 2646.50 has reacted up 10 points to fluctuate around 2652.00.
Breaking lower as the bias environment lapses would be credible for extending, and putting back into play what the open’s bounce prevented — retesting yesterday’s lows if not also resuming the decline. Otherwise, back above 2660.00 would start to signal another rally leg underway.
The First Trade & Pre-open Tour Recording… A little firmer. Maybe too little.
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 had probed above Friday’s 2692.00 high up to 2700.50, easily postured to isolate Friday’s “ineffectual pessimism.” But Monday’s open developed around 2692.00 instead of trending above it, creating a position of weakness. That didn’t prevent probing higher to 2707.00, but any probe higher would be doomed to failure. And the probe to 2707.00 failed, to put it mildly, plunging 104 points to the afternoon’s 2603.00 low. The last 15 minutes reacted up 40 points to 2643.00. Oversold RSIs left outstanding at the low require an eventual retest.
Overnight action’s new info…
Globex has been spent essentially exclusively in positive territory. Hope literally springs eternal. The late bounce waited to resume for Asia’s opens, and extended higher through midnight to test 2664.00. Brief hovering soon began reversing back down to unchanged at 2643.00. Natural support reacted back up to 2656.50, which is now struggling to maintain, let alone to extend higher.
If, then… (notes to accompany the Tour recording)
Yesterday afternoon’s sellers gained traction for their efforts through the final hour’s entry. There’s no threat to invalidate it, other than the difficulty of probing yesterday’s lows this morning from currently being 50 points higher. None of which prevents a bearish morning influence. Having spent the session essentially exclusively in positive territory, exiting the open back under its earlier 2636.25 low could trigger a sort of Globex-flip — rejecting the overnight productivity without probing the intraday high. Disappointment with not extending yesterday’s late bounce could evolve quickly into another plunge. If not already greeting the open back under 2636.25, then rallying instead through the open could spring more hope and delay the inevitable again, always eager to hand out more rope.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2658.50 would be likely to trigger the 2652.00 bias-up signal at 10:15. Exiting the open above 2669.50 would be likely also to exceed the 2667.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2636.25 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2652.50 | 2652.00 |
| …would target | 2667.25 | 2667.25 |
| Bias-down: under | 2633.75 | 2633.50 |
| …would target | 2621.00 | 2620.75 |
| 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)
Monday’s open was greeted by a significant overnight rally from Friday’s 2769.50 close, up to 2700.50. 
But Friday’s 2692.00 high was overlapped throughout the open to prevent isolating Friday’s session. This created a position of weakness — not to prevent probing higher, but to doom higher probes to failure.
The open eventually surged to a fresh high at 2707.00, and then soon began retracing. And reversing. Friday’s close was probed early in the noon hour, bouncing 16 points up to 2682.50. The afternoon’s bias environment was exited in decline, and in capitulation, falling 80 points to 2603.00. Oversold RSIs at the low require an eventual retest. Which could be as early as Tuesday morning since sellers gained traction Monday afternoon.
The last bounce limit was already being probed up to 2624.00 during its first 3 minutes. And that extended to 2643.00 at the close. Interestingly, the last bounce retraced 38.2% of the high-to-low collapse. Also interesting, the afternoon leg measured 61.8% of the high-to-low collapse. Which also means the last bounce retraced 61.8% of the afternoon leg, and could have ended the corrective bounce.
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))
Rallying overnight into a gap up Monday didn’t extend higher intraday, but also consolidated above Friday’s close. Having fulfilled its longstanding downside objective last week, near-term choppiness remains likely.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down slightly Monday trended down to test the 1228.00 sell signal. It was still being overlapped at the close to avoid triggering, but any initial weakness Tuesday morning would be credible for extending lower.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s break under the 14.57 sell signal slid back down to the uptrending channel’s lower-end, coinciding at 14.40. Hesitation there seems almost obligatory — but isn’t, because that’s not a trendline or calculable feature, only structural. Nevertheless, any initial weakness Tuesday morning would be credible for extending lower.
30-year Treasury Dec Contract (US, ETF: (TLT))
Testing the 139-26 corrective bounce target Friday to within 1 tick was pierced Sunday night up to 139-29, but Monday dipped back down to “lower prior highs” at 138-28. Which doesn’t reverse momentum down, so rallying again before dipping any deeper could next target 140-26.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming overnight to a fresh high at 67.95 was again retraced to spend the session fluctuating around the 67.25 buy signal. The delay in triggering it does open the door to probing lower — if not also to resuming the decline.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Friday already produced the pattern’s fresh lows as had been likely. That didn’t prevent gapping down again Monday, once again within the prior lows. But this is that setup’s second time, so despite not requiring a retest, Monday’s lows are likely to be probed. And probing fresh lows would be vulnerable to trending down intraday.