Posts by Rod David
Post-open Review… Pressing it.
Gap up extends.
The overnight high’s pullback to 2723.00 was recovered to 2734.00, but still almost failed to gap up above yesterday’s 2726.25 high. Surging into and out of the open did extend to fresh highs at 2740.50. That was the renewed bias-up target, which held through 10:15.
This being a Friday, the morning’s bias signal tends to persist through the noon hour. Renewed, or not, holding the bias-up target’s test through 10:15 is difficult to extend. It’s also difficult to reverse if extended. But there’s still room back down to the 2727.00 bias-up signal during the bias-up environment.
Extending through 2740.50 would next target 2743.00 and 2746.50. More importantly, an afternoon downdraft would become much more difficult. Meanwhile, almost any bearish scenario today depends upon reacting down from 2740.50 to 2727.00. Extending under 2723.00 would likely close under 2718.00 — probably by a lot.
The First Trade & Pre-open Tour Recording… Traction rewarded, again.
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…
What began as a probe of fresh lows Thursday ended as a reversal through almost every intraday timing window. A pre-open collapse to 2693.25 rewarded Wednesday’s sellers for having gained traction. But it had originated too late to avoid being retraced back up to 2707.00. Its post-open repeat got no further before bouncing off of the bias-down target and back up through the bias-down signal to rob sellers of their traction. Extending the recovery through the morning endured a noon hour pullback to extend the recovery through the afternoon. The 2726.25 peak was a 61.8% retracement back to Wednesday morning’s high, and it gained traction with the same timing as Wednesday’s sellers. Reacting down closed back under 2718.00 to avoid signaling the trend starting to reverse up.
Overnight action’s new info…
Thursday’s late pullback was maintained well into Globex, supported by 2718.00. Surging to fresh highs above 2730.00 eventually extended through Europe’s opens up to test 2737.00. It looked good, for awhile. But that extension was retraced back under 2730.00, and then to 2723.00 as yesterday’s 2726.25 high now fights to hold as support.
If, then…
Closing under 2718.00 didn’t reverse the trend down, but formed a position of weakness that dooms to failure an early attempt to extend higher Friday. The attempt part of the equation has developed overnight, so its failure can become obvious without any delay. We have two consecutive sessions of reversing early trending attempts — regardless of their being in opposite directions — so, be prepared for this to be a new behavioral pattern. Having said that, this being a Friday, renewing the bias-up or not rejecting it altogether would be vulnerable to extending higher into the afternoon.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2730.75 would be likely to trigger the 2727.00 bias-up signal at 10:15. Exiting the open above 2735.50 would be likely to exceed the 2733.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2722.50 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2725.00 | 2727.00 |
| …would target | 2731.00 | 2733.00 |
| Bias-down: under | 2712.75 | 2715.00 |
| …would target | 2705.50 | 2707.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
How much optimism can still be “ineffectual optimism”? Wednesday night’s example was a sideways range in positive territory that never trended up, and finally collapsed before Thursday’s open. 
Thursday morning’s example was the collapse’s recovery, but not of the overnight range.
Then came Thursday afternoon.
A buy signal triggered above 2710.00 targeting the bias environment’s 2715.00 bias-up signal. Which extended quite a bit higher through the bias environment lapse, up to 2726.25.
11 points above 2715.00 doesn’t seem ineffectual. But the close dipped back under 2718.00. And the bounce essentially completed a 61.8% retracement back to Wednesday morning’s high.
Meanwhile, buyers gained traction for their efforts, exiting the bias environment above the noon hour’s high and entering the final hour higher. Sellers did the same thing Wednesday, and were rewarded with the morning’s temporary collapse. Closing under 2718.00 could be a position of weakness that dooms to failure an early attempt to extend Thursday’s rally Friday. Unless Friday’s open collapses back under 2710.00 to negate Thursday afternoon’s traction.
The late pullback left outstanding a Close-quarters Double Top which is usually retested. That’s not required, but it keeps alive the upside resolution first. And being a Friday, an attempt to extend Thursday afternoon’s would be vulnerable to extending higher into the afternoon.
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))
Lower lows overnight down to 1.1595 nearly touched last week’s 1.1580 overnight low of the entire decline. Stopping optimistically short before bouncing intraday doesn’t make fresh lows any less likely on this leg.
Gold Aug Contract (GC, ETF: (GLD))
Fresh lows overnight weren’t broken until the afternoon extended to attack 1248.00. This fulfills the minimum third lower close required by the confirmed breakout, but does not at all suggest the decline is ending.
Silver Jul Contract (SI, ETF: (SLV))
Gapping down Thursday creates a new piece of unfinished business below at the open, which must be retested eventually after retesting higher prior lows. Coverage rolls forward immediately to Sep, which trades at a 9-cent premium to Jul.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday’s test of downtrending resistance at 144-26 and extended higher intraday. Thursday did not extend higher, but neither was 144-26 reversed, which would signal the momentum reversing down.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s fresh highs tested 74.00. The 75.30 target remains intact so long as pullbacks now hold 72.95 as support. Back under 71.05 would signal that momentum is reversing down.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from only so much of a position of strength that a knee-jerk reaction down would likely recover. Reacting up first would still be vulnerable to reacting down. In fact, gapping up to 3.00 and probing higher was reversed down sharply to 2.93. Closing lower Friday would signal the trend reversing down.