Posts by Rod David
Post-open Review… Resting on its laurels.
Obligatory resistance is being attacked slowly.
There’s a fine line between strong-handed patience, and ineffectual optimism. The difference becomes clearer as pessimists reveal themselves.
This morning’s pessimists are preventing the overnight retests of 2900.00 from probing higher. Not even to 2902.00. But their reactions down are unable to gain traction.
Sellers did prevent triggering the 2895.00 bias-up signal. But its inverse didn’t trigger no-bias. Instead, still testing the bias-up signal at 10:15 and 10:30 has triggered noN-bias. Neither the bias-up target above, nor an offsetting test of the bias-down signal below are required.
Trying to trend higher or lower is still possible, but not to satisfy an objective. Meanwhile, the first hours five 15-minute checkpoints all overlapped the same relevant 2895.00 level, forming a “Dry Cleaners morning” setup. It doesn’t prevent trending either, but makes trending attempts difficult and likely to return to 2895.00.
Testing 2902.00 is still likely for its proximity, and for sellers not using the first hour to reverse from its obligatory resistance. Testing 2902.00 is still vulnerable to violent rejection, for the unstable base that is forming in the interim.
The First Trade & Pre-open Tour Recording… Got there.
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…
Gapping up 4-5 points Wednesday to 2787.75 didn’t ensure trending up. Or snapping back down. Gapping up did foreshadow a bullish resolution to ranging choppily sideways until the afternoon’s FOMC Minutes. The resolution wasn’t immediate, and it was as choppy as the earlier range. But the day’s second stage did eventually break higher touched the 2894.25 61.8% retracement of the gap back up to Monday’s close. A 5-point reaction down spiked back up at the close.
Overnight action’s new info…
Like yesterday’s second stage, choppiness has persisted, and it has resolved up. Wednesday’s last-minute spike up had continued firming through the Globex open, extending to touch 2900.00. That was a retest of Monday night’s high, where price had reacted down 7 points. Last night’s reaction down was 8 points, which has already extended lower after bouncing into Europe’s opens. But at 2890.00, another bounce began, its recovery now touching the earlier 2900.00 high.
If, then… (notes to accompany the Tour recording)
Stop me if you’ve heard this one before: There’s no “unfinished business” above, as 2902.00 is only likely to be touched. If anything was required, it was to reward Tuesday’s buyers for absorbing Tuesay’s late weak-handed pre-open drop to 2880.00 with a return to the drop’s origin. That was 2900.00, and that was tested overnight, twice. Its intraday test would be more satisfying, as would a test of 2902.00 or higher, which now seems like only a formality. If/Whenever 2902.00 is tested, the pattern remains vulnerable to reversing down intraday — suddenly, steeply, and substantially. Avoiding a reversal down or limiting its depth and duration could next target 2928.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2897.50 would be likely at least to trigger the 2895.00 bias-up signal. Exiting the open above 2904.00 would be likely also to exceed the 2902.00 bias-up target at 10:15 to renew the bias-up signal next targeting 2911.00.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2890.75 | 2895.00 |
| …would target | 2897.75 | 2902.00 |
| Bias-down: under | 2881.75 | 2886.00 |
| …would target | 2876.25 | 2880.50 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | . | |
| 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 gapped up 4-5 points back to Tuesday’s 2787.50 open. Its natural resistance became more of an attraction, and price fluctuated choppily around it through the open, through the morning, and through the noon hour. Not at all surprising, if not also expected, due to anxiousness ahead of the afternoon’s FOMC Minutes.
The impact of that anxiousness suggested FOMC Minutes were being widely watched. It also suggested that releasing the Minutes would be the catalyst to launch trending, or at least to widen the range. Its last two releases had done the same. But in a classic “watched pot never boils” scenario, price action was relatively subdued, and the window’s 2886.00-2891.50 support-resistance held.
Until the window lapsed. Trending up into the final hour touched 2894.25 — retracing 61.8% of Tuesday’s opening gap back up to Monday’s close. Its resistance reacted down 5 points before the close, which was all retraced by the last minute’s spike up.
With no “unfinished business” above requiring a test, no matter how likely otherwise, no hold-long was contemplated. But Monday night’s 2899.00 prior high’s retest remains likely, likely to include 2902.00 with room up to 2911.00, while still being vulnerable to reversing down aggressively intraday.
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 Jun Contract (EC, ETF: (FXE, UUP))
Triggering its inverted Head & Shoulders pattern Monday by closing above 1.1320 had failed to confirm by only holding a test Tuesday of 1.1345 resistance. Not extending higher immediately was vulnerable to reacting down, which Wednesday did in the wake of ECB events. The low under 1.1295 intersected with the pattern’s uptrending support, reacting back up to touch 1.1345, keeping very much alive the inverted Head & Shoulders pattern.
Gold Jun Contract (GC, ETF: (GLD))
Firming Wednesday morning retested Tuesday’s highs, which had formed while fluctuating narrowly around Monday’s highs. Fresh recovery highs were probed into the close. Almost any higher close and/or early strength Thursday would be credible for extending higher into and out of the weekend. Delaying higher highs would remain vulnerable to a deeper retracement.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s gap up to Monday’s highs was ultimately retraced to test negative territory. All of which was recovered early Wednesday but not extended before or after the close. A valid recovery would make itself obvious without delay Thursday.
30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday probed Tuesday’s retest of 148-02 resistance by testing the 148-16 buy signal. Uptrending pivotal support is intersecting with resistance on Thursday and Friday, so any early strength would be credible for extending higher at a steep slope. Pullbacks still have room down to 147-24.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming Wednesday probed Tuesday’s highs, but still only attacked Tuesday’s pre-open highs that had stopped 25-cents short of fulfilling the long-standing 65.00 target.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Another shallow dip above 2.65-2.67 was recovered and 2.71 was only pierced Wednesday, greeting Thursday’s EIA report not from a position of weakness, but also not quite from a position of strength.