Posts by Rod David
The First Trade & Pre-open Tour Recording… Air pocket, right on schedule, right on target.
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 gap down and probe under Friday’s 2756.50 low was recovered to greet Monday’s open having recovered positive territory up to 2780.50. The bearish WedEX greeted the recovery there, too, producing a 31-point side through the first hour, attacking the 2749.75 overnight low to within 1 point. This destroyed the overnight recovery’s Isolation setup, meaning that its buyers had failed to gain traction for their efforts, and also meaning that the market couldn’t support a bullish setup. The balance of the session ranged flat-to-lower, albeit more flat than lower, and choppily down to 2757.00. The pattern remained vulnerable to extending the decline, at whatever pace and slope.
Overnight action’s new info…
A timid Globex open soon justified its anxiousness by collapsing to 2738.00. Trending down relentlessly extended to 2731.00 by midnight and recently attacked 2714.00. Its reaction is testing 2722.00 as resistance, where fresh overnight lows (at the time) had greeted Europe’s opens.
If, then… (notes to accompany the Tour recording)
The recent low’s failed Ascending Triangle had bottomed by attacking 2712.00, requiring its eventual retest. The pattern’s false break higher had failed from the lower of its likely objectives at 2819.50-2823.00. Its retracement back into the Triangle under 2779.00 could have launched a bigger bounce than to test 2800.00, but its 61.8% retracement of the first downleg has launched the next downleg. And the Triangle’s support consists only of flimsy “prior lows” and no more “lower prior highs,” creating an air pocket if retested. Last night’s relentless slide through the pattern is an example of that air pocket. Still, the prior lows could have offered temporary obligatory bounces if tested intraday, and gapping down under them can inhibit new sellers from reinforcing the trend. Also, relentless overnight trending is vulnerable to attracting counter-trend sponsorship at the open. So, the opening 15 minutes of volatility could define the next 30-40 point move’s direction.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2737.00 would be likely also to exceed the 2746.50 bias-down target through 10:15 to renew the bias-down signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2762.25 | 2764.00 |
| …would target | 2770.25 | 2772.00 |
| Bias-down: under | 2751.00 | 2752.75 |
| …would target | 2744.75 | 2746.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | . | |
| 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)
Sunday night’s gap down and probe under Friday’s lows had nothing to do with the bearish WedEX. Consequently, its recovery to open Monday back in positive territory was also irrelevant. The bearish WedEX’s only interest is post-open, which it did produce a 31-point side through the first hour.
Of course, this destroyed the Isolation setup that would have formed by the reaction down being shallower. The two setups could have co-existed. Choosing not to exploit the Isolation’s bullish opportunity suggests that the market remains bearish.
In fact, the balance of the session ranged flat-to-lower, albeit more flat than lower. Forming another Isolation setup at Tuesday’s open would be as credible for ending the decline. Meanwhile, the pattern remains vulnerable to extending the decline, at whatever pace and slope.
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))
Slightly higher highs Sunday night didn’t prevent gapping down Monday and extending lower intraday to attack Wednesday’s low. Stopping optimistically short of touching the prior low suggests that a lower low will be that much more substantial to compensate for the ineffectual optimism.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down slightly Monday and piercing Thursday’s low ran into an outstanding gap that held intraday, but is likely to almost break sharply lower on any fresh low at Tuesday’s open.
Silver Dec Contract (SI, ETF: (SLV))
Retesting Thursday’s lows and also 14.60 uptrending support at Monday’s open avoided breaking lower, but didn’t reject the test, keeping alive the attraction to a break lower.
30-year Treasury Dec Contract (US, ETF: (TLT))
Friday’s inside day was also “ineffectual pessimism,” but neither was rejected without Monday reversing up, and instead only remaining within Thursday’s range.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s Shallow narrow ranging didn’t exploit the possible bottoming forming after Friday avoided extending Thursday’s fresh low. A break higher would be credible for extending, but shouldn’t be positioned prematurely, as the pattern remains vulnerable to extending down.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Sunday night’s gap down was largely retraced Monday, before extending down much more decisively to confirm Thursday’s break to fresh lows.
Mid-day Update… Finding its own way.
Bearish influences have lapsed, but market hasn’t recovered.
Bearish influences are standing out. The bias environment was exited in decline and much closer to its morning lows, ending the bearish WedEX influence. The morning lows were attacked more closely during the noon hour, and haven’t been recovered. This afternoon’s 2765.25 bias-up signal held its test to trigger no-bias.
Meanwhile, there’s nothing bullish about the session.
But the list of bearish influences is just potential. Or already fulfilled. None has created any further downside requirement. This afternoon’s 2754.25 bias-down signal also held a test to avoid triggering.
Breaking under this afternoon’s 2754.25 bias-down signal as the window begins lapsing would be credible for resuming the decline. Having delayed its resumption, trending down through the close would be likely. Not yet starting to decline remains vulnerable to another bigger bounce.