Posts by Rod David
The First Trade & Pre-open Tour Recording… Try, try again.
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…
Failing to gain traction during the afternoon doesn’t prevent trending from extending the next morning. But it requires that extension to begin by gapping. Monday afternoon’s buyers had failed to gain traction up to 2925.25, so Monday night’s bounce tried to extend the rally into Tuesday morning. But the overnight bounce up to 2934.25 peaked upon filling the gap back up to Friday’s close. Its reaction greeted Tuesday’s open back at Monday’s highs, where bouncing immediately could have resumed the rally, but the reversal only continued. The critical 2919.00 support was probed twice Tuesday afternoon but held its recovery through the close.
Overnight action’s new info…
Tuesday’s last test of 2919.00 had reacted up into the 2921.00 close, and continued higher into the Globex open. Not even a consolidation interrupted the rally until eventually attacking 2829.00, where a pullback dipped to 2924.50 through Europe’s opens. Flat-to-higher ranging since then has been hovering pessimistically short of the high.
If, then… (notes to accompany the Tour recording)
Gapping up only above Tuesday’s 2928.25 noon hour high would be optimal, but still would qualify for gapping up into a morning rally. That may be moot by the market open, as hovering pessimistically short of the high is potentially bullish from a contrarian perspective. So, breaking yet higher before the open would be credible for extending higher through the morning. Anxiousness ahead, this time ahead of the afternoon’s FOMC events, could restrain price action again into and out of the noon hour.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2927.75 would be likely to trigger the 2926.75 bias-up signal at 10:15. Exiting the open under 2925.25 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2922.00 | 2926.75 |
| …would target | 2928.00 | 2932.75 |
| Bias-down: under | 2915.25 | 2920.25 |
| …would target | 2909.75 | 2914.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | .2914.00 | |
| 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 night’s bounce up to 2934.25 barely filled the gap back up to Friday’s close, probing back into its late dip. The gap actually remains unfilled because overnight tests don’t qualify, only intraday. Nevertheless, its resistance pushed price back down to greet Tuesday’s open back at Monday’s highs.
The rally didn’t start so late that its breakout attempt was necessarily false. It wasn’t so shallow that it couldn’t produce the gap up a rally would need if it were going to start before late afternoon. And the pre-open reaction down wasn’t incapable of rallying through the open.
But new sponsorship wasn’t found. And the balance of the session trended down choppily.
The critical 2919.00 support was probed twice Tuesday afternoon but held its recovery through the close. An overnight dip to 2914.00 wouldn’t be surprising, nor would already recovering from it into an opening rally, gapping up too compensate for Tuesday afternoon’s buyers not gaining traction.
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))
Monday’s failed breakout attempt wasn’t repeated Tuesday. Neither did its rubber band stretch snap back down to fresh lows, although almost any early weakness would be credible for extending down.
Gold Dec Contract (GC, ETF: (GLD))
Bouncing around in the 1201.50-1209.50 range persisted through Tuesday, with the first breakout attempt still likely at least to return within the range before extending.
Silver Dec Contract (SI, ETF: (SLV))
Trading at or above the 14.33 buy signal for two consecutive sessions broke higher Tuesday. Even if only a false break, its near-term potential was to fill the gap above up to 14.56, which was tested at Tuesday’s high. Any higher would next target 14.80.
30-year Treasury Dec Contract (US, ETF: (TLT))
Three days of hovering just above the lows resolved down overnight to 139-17, but only probed new lows intraday Tuesday down to last week’s 139-22 lows. The interim shallow consolidation kept alive pessimism, making this leg likely to be brief or shallow or both. But Tuesday’s dip reflects optimism. Regardless, Wednesday’s FOMC is being greeted from a position of weakness.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-higher ranging Tuesday held up Monday’s surge to fresh highs, suggesting that any pullback would now likely recover and resume the rally to 73.90-74.20. A reaction down Wednesday can’t be prevented, but the EIA report is being greeted from a position of strength.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
The rally’s momentum remains very much intact and extended higher Tuesday. Even a reaction down on Wednesday can’t prevent greeting Thursday’s EIA report from a position of strength.
Mid-day Update… Noise in the range.
And testing the range’s ends.
This morning’s no-bias environment triggered without testing either bias signal. 
Sure, the 2930.50 bias-up signal had been tested pre-open, but that didn’t require an offsetting test of the 2921.25 bias-down signal.
2921.25 was tested anyway at the morning’s low, by 1 point. Still being the no-bias environment, its test was required to define the window’s lower-end. Which it did, combining with oversold RSIs to produce an 8-point bounce testing 2928.00 as the bias environment began lapsing.
Oversold RSIs require a retest, which could have remained outstanding, but the noon hour has been retracing to trigger a late bias-down under 2923.50. The 2918.50 bias-down target is in-play.
Lower prior highs at 2914.00 could be tested, so long as the window were exited back above 2919.00. Meanwhile, just recovering 2927.75 would start to signal momentum reversing up, although that could leave 2918.50 outstanding as “unfinished business.”