Posts by Rod David
The First Trade & Pre-open Tour Recording… 10/4: Over, and out?
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…
Wednesday’s gap up above Tuesday’s 2936.00 highs was rewarded by extending to within 2 ticks of the morning’s 2945.25 renewed bias-up target calculation. A structural point is also outstanding there, which a 2-3 tick proximity doesn’t neutralize. But the reaction down to 2936.00 recovered only to 2942.00. And for a second consecutive session, the afternoon bias environment’s exit inverted the pattern’s likelier break higher by breaking lower. Sharply lower, 16 points down to 2925.50. Closing at or above 2928.00-2930.00 prevented sellers from gaining traction, but closing under 2936.00 prevented resuming upside momentum. No unfinished business was left outstanding.
Overnight action’s new info…
The late bounce from 2925.50 up to 2928.00-2930.00 was retraced immediately into the Globex open, back down to Tuesday afternoon’s 2924.00 low. Pauses have been brief all the way down to 2913.25 through Europe’s opens. Its retest has bounced up to 2922.00.
If, then… (notes to accompany the Tour recording)
Is the overnight action a glimpse of things to come? It may be reducing selling pressure to give buying pressure a better chance intraday. Extending yesterday afternoon’s reversal had room down to the 2919.00 area, while still being within the bottoming pattern, which is being tested now. But it’s being tested from below, from probing under 2915.50, whose post-open break would signal a much deeper drop underway. More so, a much deeper drop would likely begin by gapping down through 2915.50 and collapsing through the morning, targeting 2901.00 and lower. Opening back above Monday’s 2922.50 low would keep alive Tuesday’s Isolation setup that hasn’t yet retraced the 2-week old 2946.25 high, but there would still be plenty of challenges above to overcome before signaling the trend has reversed back up. One of those challenges being in-play right here, right now, if this overnight bounce attacking Monday’s 2922.50 low holds its resistance instead of extending higher through it.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2915.50 would be likely also to exceed the 2918.00 bias-down target at 10:15 to renew the bias-down signal. Exiting the open under 2920.75 would be likely at least to trigger the 2925.25 bias-down signal at 10:15. Exiting the open above 2927.75 would be unlikely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2928.75 | 2933.00 |
| …would target | 2935.00 | 2939.25 |
| Bias-down: under | 2921.00 | 2925.25 |
| …would target | 2913.75 | 2918.00 |
| 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)
Wednesday’s mid-day ranging was spent chipping away at resistance, somewhat similarly to Tuesday. 
It wasn’t the session highs, like Tuesday’s 2936.00 upper-end. It was just under the 2945.00 high at 2942.00. But both patterns were chipping away at their resistance, and poised to credibly break higher.
The similarities are glaring when when each bias environment lapsing at 2:30 triggers a collapse on both days — 12 points on Tuesday down to 2924.00, and 16 points on Wednesday to 2925.50.
Both recovered to close back at or above 2928.00-2930.00, preventing sellers from gaining traction. Closing above 2936.00 would have kept alive the upside momentum. So, like Tuesday’s drop, trending up Thursday morning will require gapping up above the prior high. That’s more difficult now than it was Wednesday, which gapped up above 2936.00.
Extending the pullback has room down to the 2919.00 area, while still being within the bottoming pattern. But any lower would start to threaten 2915.50, and under it is a much deeper drop, and consolidation at a much lower level.
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))
Flat-to-lower ranging Wednesday extended the decline, regardless of Tuesday already having fulfilled its minimum third required lower close.
Gold Dec Contract (GC, ETF: (GLD))
Still holding the 1209.50 bounce limit intraday, Wednesday reversed down to at least overlap the 1203.30 sell signal, if not actually probing under and triggering it.
Silver Dec Contract (SI, ETF: (SLV))
Tuesday’s 14.65 pullback limit had held but was still being tested Wednesday, maintaining the upside momentum or at least not letting sellers regain traction.
30-year Treasury Dec Contract (US, ETF: (TLT))
Friday’s bounce was rejected by gapping back down into Tuesday’s range under 140-00. The balance of the session trended down sharply to attack 138-00, and no immediate bounce would be free from the requirement to retest Wednesday’s low.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending higher Wednesday confirms the 78.10 target is in-play. Pullbacks must now hold 75.45 as support, and under 73.90 would reverse the trend down.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Extending higher Wednesday without delay confirms Tuesday’s breakout. Its 3.28 high now has room for a pulback down to 3.11 while still maintaining the upside momentum.
Mid-day Update… Hurried up to wait.
Still consolidating the post-open’s surge.
Yesterday’s 2936.00 highs held as support as the morning’s bias window lapsed. Sellers did not regain control. This doesn’t prevent dipping anyway to 2933.00-2934.00, but probably still recoverable due to the morning’s position of strength holding above 2936.00.
Meanwhile, this is a no-bias environment. It’s a little late for “no-bias trending” to probe higher, so the next 45-60 minutes is likely to range sideways. Hovering until then at or under the 2941.50 bias-up signal would be vulnerable to breaking higher through the close.
In the bigger picture, the pattern all but requires probing fresh highs. Nothing can prevent another detour down — whether limited like the past several opening surges met, or something more protracted like the prior week. But the next higher objective is 2947.50-2950.00, and then potentially 2975.00-2977.00.