Posts by Rod David
The First Trade & Pre-open Tour Recording… Caught flat-footed.
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 open held tests of its 2789.75 bias-up signal as support, and soon extended higher until testing the morning’s 2797.50 bias-up target. Reacting down through the noon hour retested the morning’s low, and reversing up into the close retested the morning’s high. The final hour was entered too low to gain traction for the afternoon recovery. So, trending up further would be unlikely, and trending up anyway would be likely to fail. The close trended up anyway. The identical open and close — not in price, but by their legs covering the same ground — is inertia. And inertia at the new extreme of a multi-session trend suggests that sponsorship needs a pullback.
Overnight action’s new info…
Did I say pullback? I meant plunge, of course. New tariffs on China released soon after the Globex open triggered a 17-point plunge to 2780.50. Drifting down to 2773.00 formed a Descending Triangle that resolved down to 2765.75. That was Friday afternoon’s high, and its touch produced a bounce back up to 2781.00. A big bounce, which produced a big reaction down to 2769.50. Now a bounce is attacking 2779.00.
If, then…
Was last night’s tariff reaction an overreaction? Buying pressure was freshly satisfied at Tuesday morning’s bias-up target, and no higher target was since triggered. More so, price action since fulfilling yesterday morning’s target only ranged sideways — and even tried to rally when it would not gain traction for the effort. Just revisiting 2788.00 was already likely to trigger substantial follow-through, which there has been. There’s certainly potential for even more substantial follow-through, like to 2761.00-2762.00, and bouncing first to 2784.00-2785.00 would likely be only a correction. But the degree of follow-through already done does introduce vulnerability to that corrective bounce, first. Holding the corrective bounce’s recovery through a relevant window would start to suggest the reaction down was done.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2780.25 would be likely also not to recover the 2782.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open above 2784.00 would be likely at least to trigger the 2789.75 bias-down signal at 10:15.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2796.25 | 2798.25 |
| …would target | 2803.75 | 2805.75 |
| Bias-down: under | 2787.50 | 2789.75 |
| …would target | 2779.75 | 2782.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN MET | 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)
[MARKET WRAP WAS HELD ONE HOUR EARLY, AND I WAS AWAY FOR THE FINAL HOUR]…
Tuesday’s gap up held small dips to its 2789.75 bias-up signal that defined the open’s low. Eventually rallying up to the morning’s 2797.50 bias-up target defined the morning’s high. And the session high, too.
At least, as of one hour before the close. But the bias environment lapsed within the noon hour’s range, and the final hour’s entry was still overlapping the bias environment high. The 3:10-3:20 proxy window must extend to fresh highs to gain traction. Otherwise, trending up is unlikely, and trending up anyway would be likely to fail.
Wednesday is free to extend higher, although there’s no momentum in place to require it. A pullback would be triggered under 2788.00, but that could also develop into something much more substantial. Opening and (presumably) closing at the opening level — at the new extreme of a multi-session trend — suggests that sponsorship is nearly finished.
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))
Monday’s reaction down from the open’s test of its 1.1850 bounce limit had barely closed positive. Already gapping down Tuesday fought back to attack positive territory. Meanwhile, Monday’s gap up was above all prior highs for the trend, so it should be retested before a durable reversal down would be credible.
Gold Aug Contract (GC, ETF: (GLD))
Trending down sharply overnight nearly fulfilled the original optimal pullback that would have made Monday’s rally durable. Testing 1248.50 overnight and closing Tuesday above 1254.50 would make the next rally leg much more reliable for extending higher durably.
Silver Sep Contract (SI, ETF: (SLV))
Monday’s open had filled a week-old gap open above. Its reaction trended down intraday and overnight to test the 15.93 pullback level from which a durable rally would have begun. The second attempt is still credible for bottoming, if closing above 16.07 Tuesday is confirmed by a higher close Wednesday.
30-year Treasury Sep Contract (US, ETF: (TLT))
Already flirting with the 145-02 sell signal Monday, Tuesday continued by fluctuating around it intraday. There is room for noise between 144-22 and 145-26 before signaling the next move underway.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming further overnight nearly threatened to finally fill last week’s 74.82 gap up above all prior highs that should be retested before a durable decline can begin, which could then be signaled under what is now the 72.90 pullback limit.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Bouncing off of 2.92 Monday instead of breaking under it didn’t reflect strength, so Tuesday’s more decisive break under 2.92 to 2.79essentially confirms are more substantial downleg is underway. .
Mid-day Update… Fear of heights. Again.
REMINDER: I’M AWAY FROM THE SCREENS FOR THE FINAL HOUR… MARKET WRAP IS HELD ONE HOUR EARLY.
The open’s inability to trend one way or the other did hold tests of the 2789.75 bias-up signal. And eventually extending higher tested and held this 
morning’s 2797.50 bias-up target. Its first reaction down back to the 2791.50 open corrected into the noon hour. Another reaction down is attacking overnight lows down to 2788.50.
And there’s still no bullish reason to retest 2788.00, unless its test were rejected abruptly.
Meanwhile, this probe down to 2788.50 comes during the afternoon’s no-bias environment, under its 2790.75 bias-down signal, which is “no-bias trending.” It should be retraced into or after the bias environment begins lapsing. The 1:20 print at 2793.50 might be tested, too.
A bounce is now probing back above 2790.75 but must hold it through the bias environment starting to lapse, or else recover it again. Neither setup would dictate the ultimate resolution, whether to recover session highs, or else to reverse the trend down sharply.