Posts by Rod David
The First Trade & Pre-open Tour Recording… The world is waiting.
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’s 2823.00 open was greeted 15 points above Monday’s 2808.00 cash session close, and 31 points off of Monday’s pre-open low. Monday afternoon’s 2812.50 bias-up target and the Isolation setup’s 2818.00 objective highs had satisfied their buying pressure overnight. And still Tuesday’s first hour extended up to 2831.25. That’s a lot of buying pressure to expend, let alone to fulfill, so reversing back down to 2812.00 was relatively easy. It should have been as easy for the session to end in a short-squeeze, but te last two hours bounced only 10 points back up to 2822.00.
Overnight action’s new info…
After several consecutive windows of robust trending, price action since yesterday’s close has been non-directional. And non-predictive of its direction. It seems that Global markets don’t know what to make of either yesterday morning’s surge or of its afternoon retracement, and they’re not impressed by the higher close. They’re more influenced now by the sudden relative slowness of yesterday’s last two hours, and its range, have contained overnight action. Initially trending back down 8 points through midnight to within 1 tick of this morning’s 2813.75 bias-down signal, the balance of the night trended back up to within 1 tick of yesterday’s last-minute 2822.00 high. Until 90 minutes ago, which has been dropping relentlessly to now retrace the entire recovery.
If, then…
Closing above last week’s 2818.00 prior highs has put into play the next higher objective at 2836.00 — subject to confirmation today, not of a second consecutive higher close but by not closing back under 2818.00. Otherwise, Tuesday’s 2823.00 open above all prior highs wants to be retested eventually from below. Retesting it before closing back under 2818.00 would be bearish, especially if 2836.00 were visited, first. Meanwhile, failing to exploit Tuesday’s late vulnerability to a short-squeeze made overnight action vulnerable to extending Tuesday’s pullback if Wednesday’s open isn’t gap up, which it’s currently not.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2816.00 would be unlikely to trigger the 2813.75 bias-down signal at 10:15. Exiting the open under 2821.00 would be unlikely to trigger the 2823.50 bias-up signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2823.00 | 2823.50 |
| …would target | 2829.00 | 2829.50 |
| Bias-down: under | 2813.25 | 2813.75 |
| …would target | 2806.00 | 2806.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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’s recovery had extended through the futures close to fulfill its 2812.50 afternoon bias-up target. Then overnight action extended higher to fulfill Friday’s Isolation setup objective of retesting last week’s 2818.00 highs. The overnight rally extended even higher to open at 2823.00, extending through the open up to 2831.25. All off of the overnight dip to 2792.00. Exhausting.
In fact, exhausted. Reversing down during the morning bias environment to 2821.00 fulfilled the pullback’s objective. Its reaction up to 2827.00 was reversed during the afternoon to its 2812.50 bias-down target. Also exhausting.
The vulnerability to a morning reversal was discussed pre-open during the Market Tour before actually recovery 2818.00. Also discussed was the difficulty facing a reversal to actually close back in negative territory. It wasn’t likely. Actually, it was narrowly avoided.
Tuesday’s final two hours trended back up almost 10 points to 2821.50, but not aggressively. A short-squeeze was likelier — not from strong handed buyers, but from dumping the ballast of weak handed sellers. In its absence, overnight action is vulnerable to dipping even deeper to probe under 2808.00, or else to extending the late bounce.
Regardless, Tuesday’s 2823.00 open above all prior highs wants to be retested eventually from below. And Tuesday’s high can be probed up to 2836.00. Those upside objectives help to entrench a bullish context, which counter-intuitively enables a deeper pullback if the recovery hesitates here.
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))
Dipping overnight to 1.1700 had recovered to open flat Tuesday, and then improved up to 1.1765. But the session turned negative, holding the critical 1.1725 pullback limit which keeps alive the 1.1850 upside attraction.
Gold Aug Contract (GC, ETF: (GLD))
An overnight dip to 1218.00 was recovered to open flat Tuesday, but only improved to attack 1230.00. The restrained optimism helps to dismiss the shallow pullbacks that should still fill last Thursday’s 1215.00 opening gap before completing a bottom.
Silver Sep Contract (SI, ETF: (SLV))
Falling back to 15.35 overnight was recovered so much that Tuesday’s open gapped up to the past week’s 15.55 highs. Its brief probe was retraced back under the prior highs. But positive territory was maintained throughout, after gapping up, which is “ineffectual optimism.” Almost any delay to extending higher Wednesday would all but ensure retesting last Thursday’s 15.23 gap down.
30-year Treasury Sep Contract (US, ETF: (TLT))
Still probing under the 143-02 target Tuesday morning down to 142-21 would have allowed lowering the bounce limit, if 143-02 isn’t recovered through the close. Which a late bounce up to 143-07 suggests. Otherwise, closing under 143-02 would all but confirm that an even deeper decline is underway.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s opening test of the 68.82 buy signal had failed, and was eventually retraced overnight to the 67.50 lower prior high’s support. All of which was recovered into Tuesday’s open, which retested 68.82. The signal held again, but it was still being tested, and not necessarily rejected. Extending higher at Wednesday’s open would be credible for targeting the 71.75 corrective bounce target.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Gapping down Monday held support at last Thursday’s opening print, without recovering or extending from there. Tuesday only ranged sideways, like Monday’s post-open action, still likely at least to probe fresh lows.
Mid-day Update… The downside of blow-offs.
Overnight rally’s retracement approaching unchanged.
This morning’s doubly-renewed bias-up fulfilled its 2829.50 up to 2831.25. Exiting the bias environment above 2829.50 would have put into play 2836.00. 
But back under 2828.00 would trigger a pullback to at least 2821.00.
2828.00 broke lower to 2821.00 before the bias environment even came within view of lapsing. It began lapsing at the 2825.25 renewed bias-up target. The choppy noon hour bounced a little higher to 2827.00.
It’s been straight down from there. This afternoon’s 2820.50 bias-down signal triggered, and its 2812.00 bias-down target has been attacked to within 5 ticks. Now a reaction up is testing last week’s 2818.00 highs as resistance.
Back under 2815.75 would signal the decline has resumed. As I described before the open, it’s difficult to expend enough selling pressure from such a high open to probe back into negative territory, let alone to close negative. That makes this reversal unlikely to reverse the trend down. Unchanged (2808.00-2812.50) is natural support, and sellers will need reinforcements to avoid bouncing into the close.