Posts by Rod David
Post-open Review… Watch out for falling headlines.
Two bullish signals, and a wild card.
Overnight testing and retesting of 2793.50 doesn’t necessarily dictate intraday action. Regardless of its proximity to the next lower target of 2791.25, only post-open action could put it into play. Maintaining an open under 2804.00 would have done that. That’s where the open was greeted, which improved from there. So, 2791.25 is not in-play.
The overnight low and its retest both reacted back up into yesterday’s range above 2800.00-2802.00. The second reaction’s recovery persisted through the open, which forms an Isolation setup. Isolating the probe under yesterday’s lows to the overnight — so long as yesterday’s 2800.00-2802.00 lows continue holding — is usually rewarded by retracing the overnight probe’s origin. That’s 2818.00.
Meanwhile, this morning’s 2802.25 bias-down signal was touched post-open. Holding its test through 10:15 has put into play an offsetting test of the 2811.00 bias-up signal. The bias-down target was tested overnight, but only overnight, so its offsetting test isn’t required.
The Isolation setup identifies context. Its afternoons don’t necessarily extend the morning’s direction. So, we’re still monitoring for the bearish WedEX afternoon influence.
The First Trade & Pre-open Tour Recording… Range.
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…
No “unfinished business above” outstanding as of Wednesday’s close for a second consecutive session left the market vulnerable, and a retest of Wednesday’s 2818.00 high was reversed down overnight to 2806.25. Thursday’s opening bounce attacked 2813.00 and quickly reversed down sharply to fresh lows at 2800.25. But the morning’s 2804.00 bias-down target held. In fact, 2804.00 held repeatedly throughout the choppy session. The morning’s recovery to its 2811.00 bias-down signal was retraced to 2804.00 after noon (amid Trump’s interest rate comments). And another recovery to the afternoon’s 2813.25 bias-up signal was retraced to 2804.00, firming a couple of points into the close.
Overnight action’s new info…
Wild. Globex continued firming innocently from Thursday’s late drop and got up to 2810.50. China’s devaluation took great and immediate effect, triggering a plunge to 2793.50. Reacting up had trended through Europe’s opens amid Italian dept drama, returning to Thursday’s 2806.00 close. Trump’s wider tariff threat in response to China took great and immediate effect, triggering a plunge to 2793.00. Reacting up has retraced 61.8% of the plunge to 2801.50 — back within yesterday’s range, again
If, then…
Trending any lower through Friday’s open would have set the tone for extending the drop either to 2791.25 or 2781.00 and 2775.00. Coming so close overnight (twice) to the closer target doesn’t make the farther target any likelier. More important will be whether 2791.25 is yet tested during a timing window, and then whether its test had held through that timing window’s exit. That’s if the overnight bearishness persists through the open — expiration open, which can be surprising — which is currently indicated above yesterday’s lows where an Isolation setup could trigger. It also doesn’t necessarily affect the afternoon’s bearish WedEX, although its influence may be exacerbated.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2794.25 at 9:45 would be likely also to exceed the 2795.50 bias-down target at 10:15, renewing the bias-down signal. Exiting the open under 2799.25 would be likely at least to trigger the 2802.25 bias-down signal. Exiting the open above 2805.00 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2810.00 | 2811.00 |
| …would target | 2815.50 | 2816.50 |
| Bias-down: under | 2801.25 | 2802.25 |
| …would target | 2794.50 | 2795.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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)
We knew at Wednesday’s close there was no “unfinished business above” or other attractions to higher prices in-play. The Globex session soon figured it out, too, first retesting Wednesday’s 2818.00 high and then reversing down overnight to 2806.25. The gap down’s opening bounce attacked 2813.00 and quickly reversed down to fresh lows at 2800.25. But the morning’s 2804.00 bias-down target held.
Thursday’s session was choppy, but contained easily within the open’s wide range. Bouncing from 2804.00 tested the morning’s 2811.00 bias-down signal before noon. The noon hour returned down to 2804.00 (amid Trump’s interest rate comments) and bounced again to touch the afternoon’s 2813.25 bias-up signal. The no-bias environment lapsed into another drop that reversed down to 2804.00 at the close.
2804.00 seems to be important.
Trending any lower through Friday’s open would set the tone for extending the drop either to 2791.25 or 2781.00 and 2785.00. Otherwise, rallying back up to this week’s 2818.00 highs is possible, but not required as an alternative to dropping. Only gapping up above Thursday afternoon’s 2813.25 high — after having dropped into the close — would target fresh highs. And that would require invalidating or inverting the afternoon’s bearish WedEX influence.
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))
Wednesday night’s drop gapped down Thursday under the 1.1665 support that had defined Wednesday’s low. Testing four-week old 1.1620-1.1625 support reacted up again Thursday, first bouncing and then surging back into positive territory to 1.1725 resistance. Closing any higher Friday would target the gap back up to 1.1850.
Gold Aug Contract (GC, ETF: (GLD))
Trending down overnight and gapping down sharply to test 1211.00 firmed through the morning, then surged out of the noon hour’s interest rate comments. The gap back up to Wednesday’s 1228.00 close was nearly filled. Regardless, Thursday’s 1215.00 opening print can now be filled from above to form a durable bottom.
Silver Sep Contract (SI, ETF: (SLV))
Thursday’s gap down to test 15.20 had consolidated back to the decline’s 15.25 target area when the interest rate comments triggered a sure that touched Wednesday’s 15.42 “higher prior lows.” Now Thursday’s opening print can be filled from above to form a durable bottom.
30-year Treasury Sep Contract (US, ETF: (TLT))
Probing Monday morning’s low down to 144-12 stopped short of its 144-08 potential before surging once again back into the 145-02/145-25 range. While Monday’s dip warned of a deeper probe coming, could Thursday’s dip be that completed probe? Probably not, but less so if Thursday’s bounce isn’t retraced into the weekend.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Closing above Tuesday’s 68.45 interim high — more decisively than Wednesday — suggests that a bottom is forming. A second consecutive higher close is required to confirm.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA reprot from a position of weakness only gapped down and probed fresh lows down to 2.70. The knee-jerk reaction surged back up to 2.77. The outside day probed above Wednesday’s highs, which doesn’t require any upside follow-through, but should avoid probing above Thursday’s highs to maintain the decline’s momentum.