Posts by Rod David
Post-open Review… Not holding up, but still headed up?
Gap up maintains, until it doesn’t.
The pre-open drop back down to the earlier 2938.00 Globex low was absorbed. Its test had developed too early from too high to attract reinforcement. 
Probing back above yesterday’s 2940.75 high neutralized the threat of a bearish morning.
At least, that bullet was dodged, and now another shot has been fired.
Probing back above yesterday’s high surged through the overnight high’s 2945.50 “new Globex trend extreme” to neutralize its attraction above. Extending to within 2 ticks off this morning’s 2947.50 bias-up target 2-3 minutes pre-open then collapsed to 2942.25 2-3 minutes post-open.
Bias-up ultimately triggered as 2942.25 held above the 2940.50 bias-up signal through 10:15. The bias-up signal was probed by 2 points through 10:30, but still overlapped throughout. That doesn’t qualify as invalidation — which would have been extremely unlikely, having avoided even its threat until well past 10:15. The 2947.50 bias-up target is in-play.
Could the delay extend? Back under 2939.25 would suggest that yesterday 2936.00 last relative low will be tested. But the bias environment must lapse under its 2933.50 bias-down signal to invalidate its bias-up signal.
The First Trade & Pre-open Tour Recording… New Highs, or not.
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 thinly-traded narrow range resolved just hours before Thursday’s open. Gapping up 12-13 points to 2928.00 then trended higher relentlessly into the afternoon to attack 2941.00. Its proxy served to trigger an actively bullish WedEX. Thursday afternoon’s final hour entry and proxy window gained traction, which the position-squaring window neither exploited nor rejected.
Overnight action’s new info…
Globex initially consolidated Thursday’s gains while ranging flat-to-higher up to 2942.50. That became slightly more pronounced into and out of Europe’s opens, extending briefly to 2945.50. Its complexity creates a “new Globex trend extreme”. The reaction has now retraced back into yesterday’s range to test the 2938.00 earlier Globex low.
If, then… (notes to accompany the Tour recording)
This dip back into yesterday’s range is testing the earlier Globex low, and breaking it through the open would reverse the trend down for at least the morning. There is meanwhile now another upside attraction or influence in addition to this afternoon’s bullish WedEX. It’s the overnight probe of fresh highs that formed a “new Globex trend extreme,” which requires intraday retest. Thursday afternoon’s traction doesn’t immunize Friday morning from a pullback. And a morning pullback wouldn’t necessarily interfere with the afternoon’s plans. Regardless, keep in mind that expiration — Quad Witch, no less — can accentuate, accelerate, or prematurely abandon otherwise reliable signals. This being a Friday, the morning’s bias tends to persist through the noon hour.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2937.50 would be unlikely to trigger the 2940.50 bias-up signal at 10:15. Exiting the open above 2943.25 would be likely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2934.50 | 2940.50 |
| …would target | 2941.50 | 2947.50 |
| Bias-down: under | 2927.50 | 2933.50 |
| …would target | 2922.25 | 2928.25 |
| Signal status: BIAS-UP | . | |
| 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)
Gapping up Thursday and trending higher relentlessly into the afternoon confirms the longstanding bigger picture’s expectations that new highs be made aggressively into an ultimate top. The expectation has also been for multiple consecutive uptrending sessions, which is likely since expirations rarely produce trend extremes. We’ll discuss that in more detail this weekend.
Meanwhile, simply maintaining Thursday’s gap up serves by proxy to form a bullish WedEX. That will apply to Friday afternoon – Monday morning. Friday morning might trend up anyway, too, since Thursday afternoon’s final hour entry and proxy window gained traction, and the position-squaring window didn’t reject it.
Thursday afternoon’s traction doesn’t immunize Friday morning from a pullback. Neither would a Friday morning pullback interfere with the afternoon’s bullish WedEX influence. Regardless, keep in mind that expiration — Quad Witch, no less — can accentuate, accelerate, or prematurely abandon otherwise reliable signals.
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))
Recent “ineffectual optimism” wasn’t exploited Wednesday, which left the door open to extending down aggressively Thursday. To the contrary, fresh highs overnight gapped up sharply Thursday to test 1.1865, still having room up to 1.1845 before abandoning any near-term vulnerable to launching a new downleg — which would be confirmed only upon closing under 1.1785.
Gold Dec Contract (GC, ETF: (GLD))
The 1201.50-1209.50 range’s upper-end was probed overnight, and again intraday Thursday up to 1213.00. Triggering it, and then confirming with a second consecutive higher close into the weekend would launch a new upleg, albeit likely temporary with unfinished business below still outstanding. Not triggering the 1209.50 buy signal, or not confirming it, could instead stretch the rubber band to snap back down.
Silver Dec Contract (SI, ETF: (SLV))
Probing the 14.33 buy signal overnight, or perhaps more accurately just overlapping it up to 14.38, was unable to trigger Thursday. But almost any further strength early Friday would be likely to extend higher into the weekend.
30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s early trading held a retest of the 139-26 support that had also held Wednesday, before reversing up to attack 140-20. Closing above 140-04 robs the decline of its momentum, so an immediate dip Friday would be likelier to hold if not also reverse up into the weekend.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to NOV, which is trading at a 25-cent discount to OCT]… Fresh highs overnight up to 71.35 were attacked post-open up to 71.25, as part of the same range, so no fresh high is required in this setup. More predictive is whether the confirmed breakout’s third higher close is fulfilled above 70.75. Closing under 69.05 would reverse the trend down.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength. Its knee-jerk reaction down to 2.88 snapped back up and extended sharply higher to 2.99, establishing the new rally leg underway.