Posts by Rod David
Post-open Review… Digging Deeper.
29-point plunge already testing its objective.
Gapping up today could have given a recovery better chances for reversing the trend back up. 
Repeatedly recovering intraday dips without reversing above a prior high had kept alive last Thursday-Friday’s downside momentum. And if the Monday-Tuesday action wasn’t accumulation, then the next lower objective would be 2850.00.
That was quick. The first half-hour slid from its 2879.50 open down to 2851.00. That’s within 4 ticks of the objective, which is close enough for a new extreme. Bouncing to 2861.50 is is reacting down, which threatens fresh lows — and the next lower objective would be 2844.00.
The relatively late break from overnight ranging does keep alive potential for only a brief dip. The open maintained the break and extended it, quickly minimizing the potential for bouncing back into the overnight range. But quickly collapsing can also reflect weak hands that are sooner neutralized.
Regardless of this dip being a bottom, or only a pause, not already rallying into the noon hour would make fresh session lows likely.
The First Trade & Pre-open Tour Recording… Range bound (wink).
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…
Tuesday’s range was the narrowest since last Wednesday, and the first session since then not to trend. Fluctuating around Monday’s 2890.00-2894.00 close was never complacent to be unchanged, probing positive and negative territory, then ending at 2886.00-2888.00. Sponsorship for divergent opinions isn’t suffering, which is usually the recipe for soon exploding in one direction or the other. No traction was gained either way Tuesday afternoon, requiring that credible trending Wednesday morning begin by gapping open.
Overnight action’s new info…
Yesterday afternoon’s range hasn’t been broken overnight. Trending attempts have been brief and contained between 2882.00-2891.00, its range narrowing too slightly to be labeled. Price is currently testing 2888.00.
If, then… (notes to accompany the Tour recording)
Gapping up above Tuesday’s 2900.00 high isn’t currently indicated, which would be credible for extending higher intraday. A late surge may yet threaten it, but surging late from an overnight range usually proves to be a head-fake that is retraced, and often rejected. Breaking lower within 60-90 minutes of the open would also be unlikely to extend, at least not before retracing back into the overnight range. Either scenario complies with the template I described yesterday, that the choppy range reflects widely disparate opinion and not complacency. Meanwhile, the close has room up to 2914.00 before signaling the trend has reversed up. Just closing above Friday and Monday afternoon’s 2895.00 highs would at least indicate a bottom has formed. Ultimately breaking lower would all but ensure retesting Monday’s 2866.00 low, and then probably also 2850.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2884.50 would be unlikely to trigger the 2880.50 bias-down signal at 10:15. Exiting the open under 2877.00 would be likely to trigger bias-down.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2889.75 | 2894.75 |
| …would target | 2807.25 | 2902.25 |
| Bias-down: under | 2875.50 | 2880.50 |
| …would target | 2868.00 | 2873.00 |
| 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)
Tuesday’s fluctuation around Monday’s close didn’t spend much time at unchanged. The morning’s two opposing trending attempts were never equaled intraday, let alone exceeded. But volatility persisted through the close. The market has widely opposing opinions and it is trying to express them all.
That’s usually the recipe for a exploding in one direction or the other. No traction was gained either way Tuesday afternoon. So credible trending Wednesday morning would begin by gapping pen.
Gapping up above Tuesday’s 2900.00 high, not, there’s room up to 2914.00 before signaling the trend has reversed up. Just closing above Friday and Monday afternoon’s 2895.00 highs would at least indicate a bottom has formed. Gapping down to and through Tuesday’s 2879.00 low would all but ensure retesting Monday’s 2866.00 low, and then probably also 2850.00.
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))
Tuesday gapped down again and immediately stopped trending down again, retracing back into the prior day’s range again. But unlike Monday, the open’s gap down under all prior lows to 1.1495 remains open and all but requiring being filled from above before a credible rally could begin. The trend otherwise remains down.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s chippy open eventually firmed into positive territory, not reversing Monday’s drop or even probing above Monday’s post-open high, but also not producing a second consecutive lower close that would have confirmed Monday’s breakout from a multi-session range. Extending the decline Wednesday should begin without further delay to be credible for extending down.
Silver Dec Contract (SI, ETF: (SLV))
Flat-to-higher ranging Tuesday tested “higher prior lows” at 14.40, bouncing again off of the attack on uptrending support that had halted Monday’s drop. Breaking under 14.27 would be credible for extending the decline intraday.
30-year Treasury Dec Contract (US, ETF: (TLT))
Slightly lower lows overnight down to 136-15 confirmed that no bottom has formed over Monday’s government holiday. A new trend extreme precludes triggering a reversal signal on the same day. Extending Tuesday’s intraday bounce above its 137-24 high to also recover 138-04 would start to signal momentum reversing up. The downtrend meanwhile remains intact.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s recovery back above its 73.90 pullback limit / sell signal was extended overnight, but only to attack the 75.30 buy signal, which must still be recovered through a close to reinstate the 78.10 target above.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Friday’s dip to the 3.11 pullback limit had needed to resume the rally without delay, which Monday did by rallying to fresh highs attacking 3.30. But the rally began by gapping up sharply, creating a new attraction below back down to Friday’s close. Maintaining the rally Tuesday required extending higher without delay, too, but probing higher overnight to 3.37 was still retraced before the open and only ranged narrowly sideways intraday. A corrective dip has become likelier than extending the rally near-term.