Posts by Rod David
Post-open Review… Going with it.
Gap up maintains, slow to extend.
The overnight rally testing 2837.00 had pulled back pre-open to test 2832.00 as support. 
That was Friday morning’s low, and the upper-end of the range whose recovery would extend the overnight rally. Its reaction through the open did probe fresh highs up to 2839.00.
At least, the gap up was maintained. But it didn’t extend. No higher high printed until after the first half-hour, and then grudgingly by 2 ticks a half-hour later.
Nevertheless, expectations remained intact for filling the gap back up to Tuesday’s 2841.00 close. It’s being tested now. Potential remains alive for probing it up to 2844.50, which would be vulnerable to another corrective dip. Ultimately, however this test of 2841.00 resolves, not reversing this morning’s recovery makes the retest of 2864.00 and higher likely back in-play.
The First Trade & Pre-open Tour Recording… News-driven.
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 night’s 20-point slide greeted Wednesday’s open at Monday’s close and under Friday’s lows, which served as resistance to the balance of the session. The open’s 23-point collapse to 2803.00 never extended any deeper any later, but it contained two intraday rallies. Barely, in the second rally’s case, which was just shallow enough to fulfill the fresh low close that Friday’s confirmed breakout had required. The morning’s low stopped 1 point short of its room for noise under the decline’s 2808.00 objective, which held two tests as support. The knee-jerk reaction to a headline coincided with an existing 2811.00 buy signal to produce the session’s second rally leg. The cash session’s 2819.00 closing equivalent was still overlapping 2818.00, a pivotal level that had served to attract morning sellers and now also afternoon buyers. Actively bearish WedEX triggered, as barely as Wednesday’s close had fulfilled the outstanding requirement for an eventual lower close.
Overnight action’s new info…
Fluctuating around yesterday’s close was almost reversing when another headline (China sending delegation to U.S. for trade talks) triggered another favorable knee-jerk reaction. Its surge tested and retested 2832.00 before dipping to 2825.50 into and out of Europe’s opens. But that found support to launch another upleg probing higher to 2837.25.
If, then…
Did I mention yesterday that the door remained open to probing fresh lows Thursday down to 2802.00? Only three times, noting each reason why (including the afternoon’s 2811.00 headline origin being an attraction below). Reaction to overnight news has made that less likely — so long as the open gaps up enough launch a recovery leg, as I also noted. Interestingly, that’s Friday’s 2826.00 and 2832.00 “higher prior lows” (now support, assuming their recovery through the open), whose solid breaks yesterday had finally invalidated Monday’s bullish Isolation setup. Gapping up would also serve by proxy to invert yesterday’s bearish WedEX. WedEX’s inversion is official if maintained through the opening 15 minutes of volatility, which would also negate any near-term attraction back down to 2802.00. The rejection of attractions below typically accelerates the pace of trending to attractions above.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2832.00 would be likely also to recover the 2830.50 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2828.00 would be likely at least to trigger the 2824.50 bias-up signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2824.25 | 2824.50 |
| …would target | 2830.25 | 2830.50 |
| Bias-down: under | 2814.50 | 2815.00 |
| …would target | 2807.50 | 2808.00 |
| Signal status: BIAS-UP, BIAS-UP 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)
First of all, Monday’s Isolation setup is invalidated. That’s mostly due to the overnight 20-point slide that greeted Wednesday’s open under Monday’s lows. Collapsing another 23 points through the open didn’t help. The morning’s drop never extended, despite being corrected through the noon hour back up to 2819.00. That’s potentially “ineffectual optimism,” which keeps the door open to probing fresh lows Thursday down to 2802.00.
Meanwhile, the next lower objective held two tests intraday at 2808.00. That would have been more bullish had the afternoon’s retest also probed under the morning’s low before recovering. Which also keeps the door open to probing fresh lows Thursday down to 2802.00.
Wednesday’s last upleg attacking 2823.00 was triggered by a non-financial headline, so retracing to its 2811.00 origin is likely. That happened to be an active buy signal, but the artificial catalyst crowded out the organic sponsorship. Its attraction below could help to start a reversal down, which also keeps the door open to probing fresh lows Thursday down to 2802.00.
Friday’s confirmed breakout had required an eventual third lower close, which Wednesday narrowly delivered. That doesn’t care about any doors open below. The decline could still extend, but gapping up enough Thursday could launch a recovery leg.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot… Euro and Metals reversals imminent?
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))
Still trending down overnight greeted Wednesday’s open with a slightly lower gap that extended to fresh trend lows. That was retraced into the noon hour, then probed positive territory. The open was just under Tuesday’s low to require being filled from above — which it was, before entering the noon hour. Closing above 1.1385 would signal momentum reversing up.
Gold Dec Contract (GC, ETF: (GLD))
Already dipping into the 1188.50-1191.50 target area overnight, Wednesday’s gap down extended lower through the morning to attack 1182.50. The 4-day sequence suggests that Thursday will either not probe fresh lows or else recover from fresh lows, and in either case probe positive territory. A corrective bounce into the weekend would target 1208.00.
Silver Sep Contract (SI, ETF: (SLV))
Even further compensation for the delay in filling the 4-week old gap back to 15.25 opened Wednesday sharply under Tuesday’s 14.97 low to 14.80, and collapsed down to 14.35. Tuesday was somewhat of a breakout, so this is somewhat of confirmation, an at least an eventual third lower close is likely — regardless of an interim corrective bounce.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday’s gap up extended through Friday’s 144-22 high to test 145-00, then reversed back under Friday’s high. Not closing above 144-22 Wednesday would suggest a top is in, and the breakout isn’t valid.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already greeting Tuesday’s post-close API data from a position of weakness and reacting poorly, Wednesday’s 50-cent gap down to 66.50 fell another $2 to fresh lows at 64.50 in reaction to the morning’s EIA report. Closing above 66.10 would signal momentum reversing up.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report isn’t being greeted from a position of strength. Tuesday’s premature probe of fresh highs, which barely qualified as a breakout, wasn’t confirmed by a second consecutive higher close Wednesday. Avoiding a deeper pullback Thursday — or recovering from an initially negative knee-jerk reaction — would be the only bullish scenario.