Posts by Rod David
Post-open Review… Bouncing, in lieu of selling.
No new sellers.
[CORRECTION: First Trade’s post referenced Wednesday afternoon’s bias parameters and not this mornings. The bias parameter post is always the legitimate source.]
Not extending down out of the open would make a morning decline unlikely. 
And a pre-open dip had bottomed at this morning’s 2858.50 bias-down signal. Which wasn’t touched post-open, so only triggering no-bias doesn’t officially put into play an offsetting test of its 2868.50 bias-up signal.
But 2858.50 was touched within 3 minutes of the open. Which is close enough to plan for the market behaving as if the intraday crowd participated in the failed effort to break under it — at least, until disproved. In fact, 2868.50 is being tested now, including its room for noise up to 2869.50.
It’s too late to exceed 2868.50 through 10:30, which would have invalidated the no-bias signal. So, this test of 2868.50 should define the window’s upper-end. Probing above it anyway would be “no-bias trending” that requires being retraced.
The First Trade & Pre-open Tour Recording… Flat-to-lower-to flat.
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…
Closing flat with its 2863.50 open Tuesday had reflected indecision and distribution, enabling the afternoon’s decline to extend down sharply overnight to attack 2846.00. Recovering to greet Wednesday’s open at 2859.50 and extend through the morning to 2868.00 fulfilled the expected corrective bounce of the drop from Tuesday’s high. Dipping to 2860.50 through the 2:30 bias window exit produced a shallower bounce, which was retraced entirely into the close. The cash session close was within 3 ticks of 2863.50, still reflecting distribution.
Overnight action’s new info…
Flat-to-lower-to flat. The Globex open quickly firmed to probe 3 ticks above Tuesday’s 2863.50 cash session close. A reaction to China’s overnight intervention triggered a dip to 2857.50 by midnight. All of which has been retraced to retest Tuesday’s 2863.50 cash session close.
If, then… (notes to accompany the Tour recording)
Leaving no “unfinished business” above Tuesday had also enabled the steeper, deeper overnight dip. Wednesday also leaves no unfinished business. But Tuesday’s drop was already underway organically, before that sponsorship was crowded out by the weak-handed knee-jerk reaction to a synthetic catalyst. That leg didn’t require a complete retracement to the headline’s origin, but it’s been done anyway. Can another downleg be credible before more fully rewarding Tuesday night’s buyers with fresh highs above 2874.00? Probably not if Thursday’s open doesn’t quickly start producing that downleg (I describe three setups in the Market Tour). But not gapping up to and/or through Wednesday’s 2868.25 high would not require a rally to target any particular higher objective.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2867.25 would be unlikely to trigger the 2869.50 bias-up signal at 10:15. Exiting the open above 2863.50 would be unlikely to trigger the 2860.25 bias-down signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2868.00 | 2868.50 |
| …would target | 2873.25 | 2873.75 |
| Bias-down: under | 2857.75 | 2858.50 |
| …would target | 2851.75 | 2852.50 |
| Signal status: NO-BIAS | . | |
| 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 close was flat with Tuesday’s 2863.50 close, at least to within 3 ticks. That’s after Tuesday’s close was flat with its open, representing indecision, and classifying intraday price action as distribution.
Wednesday’s open was a little lower than 2863.50. Except for a momentary post-open dip, most of Wednesday’s session developed above 2863.50, making it distribution, too.
And there’s no “unfinished business” above. Again.
Which would be pretty bearish near-term, usually. However, Tuesday afternoon’s slide through the Globex open may have crowded out the organic sponsorship for reversing the trend down. Even the most bearish scenario would have to reward the dip’s buyers with fresh highs above 2874.00 before another downleg could be credible.
Already trending down into Thursday’s open, or reversing a gap up, would be vulnerable to extending down into the weekend. Otherwise, gapping up to and/or through Wednesday’s 2868.25 high would essentially put into play 2883.00.
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 Sep Contract (EC, ETF: (FXE, UUP))
Already having fulfilled both higher objectives Tuesday at 1.1545 and 1.1625, while testing “higher prior lows” from the decline, trying to probe higher overnight to 1.1645 wasn’t likely to extend Wednesday. Its reaction down Wednesday morning didn’t actually reverse the trend down, however likely that may be, and extending the rally would next target 1.1705.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s close above 1195.00 extended higher overnight and gapped up Wednesday to test the next higher resistance at 1207.50. Reacting straight back down through the morning filled the gap back down to Tuesday’s close. Back under 1191.50 would reverse the trend back down, but there’s otherwise room up to 1215.00-1220.00.
Silver Sep Contract (SI, ETF: (SLV))
Probing the 14.63-14.80 range’s upper-end overnight was retraced into Wednesday’s open, dipping back into the range, instead of extending to 15.05 above, and still attracted to 14.45 below.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping up Wednesday and probing a fresh high wasn’t assured of extending higher. It would likely be at a steep slope, or else the rally would otherwise have peaked. Retracing the intraday fresh high probe back under Monday’s high would be “ineffectual optimism” and more vulnerable to reversing down.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Rallying overnight gapped up to fresh recovery highs and extended to test the week-old 67.50 gap up above prior highs, neutralizing its attraction above. Closing above its 67.75 intraday would keep alive the next higher attraction at 68.30.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
The attraction back down to 2.85 remains intact so long as the rally back to prior highs isn’t extended Wednesday. Especially on a closing basis, which would greet Thursday’s EIA report from a position of strength. Wednesday morning’s dip back down to prior highs at 2.95 doesn’t create any added strength.