Posts by Rod David
Post-open Review… Holding pattern.
Gap up fails to hold all relevant resistance.
Opening up to 2768.25 was quickly reversed back down through throughout the opening 15 minutes to to 2762.50. 
Yesterday afternoon’s 2761.50 high was still recovered at that moment, at 9:45. It was being probed by another point a moment later. Regardless, its test was no longer relevant.
Yesterday’s late-morning high at 2763.50 had become more relevant, because the open tested it. Buyers could have conserved their energy instead of expending it above 2763.50 — 5 points above it — but that’s what weak-handed sponsorship does. Apparently, that’s who comprised the reinforcements attracted at that stage, as 2763.50 failed to hold through 10:15.
The session-long rally setup is moot. It wasn’t rejected decisively, so the setup’s resolution won’t necessarily be as bearish as it would have been bullish. Also, bias-up triggered cleanly, although its 2765.50 bias-up target wasn’t exceeded in time to renew the bias-up signal. And an attempt to break under the 2759.00 bias-up signal at 10:30 held instead of being invalidated.
So, the rally might resume. Friday morning bias often persists through the noon hour. But that’s as much a held bias-up target as it is a triggered bias-up signal. And breaking back under 2759.00 when the bias environment lapses could resume yesterday’s decline.
The First Trade & Pre-open Tour Recording… Reversal alert, and caveat.
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…
Yhursday’s 2769.50 open was only slightly negative, but it was well under Wednesday night’s 2785.75 high. That triggered the Globex reversal setup to produce a bearish Thursday morning that almost touched 2750.00. A corrective bounce up to 2763.50 was eventually reversed to fresh session lows at 2747.00. Sellers gained traction for their efforts, but the late drop still stopped optimistically short of Tuesday’s 2746.00 post-open low. A bounce closed back above the morning’s 2750.25-2751.50 lows, but under 2756.00.
Overnight action’s new info…
Quickly dipping attacked 2749.00 before reversing up more substantially. This morning’s 2759.00 bias-up signal held the first multi-hour consolidation. It broke higher after midnight, extending effortlessly through Europe’s opens, to probe 1 point above this morning’s 2765.50 bias-up target.
If, then…
Another night, another reversal setup. So, another reversal setup caveat, too. First, the setup. Overnight action has trended relentlessly in one direction. And not arbitrarily, but back to the bias-up signal. Back to the bias-up target. Through yesterday afternoon’s high (which printed before the bias environment had begun lapsing), and through yesterday’s late-morning high for added effect. Exiting the open above a prior high suggests that new sponsorship intends to extend the trending intraday. Yesterday’s last-minute bounce doesn’t disqualify an open above yesterday afternoon’s high from forming a “session-long rally” setup… And now, the caveat. Session-long rally setups can be as bearish as they would have been bullish, if the fully formed setup doesn’t trigger. How? Relentless overnight trending can often inhibit reinforcements at the open, having become more attractive to counter-trend sponsorship. We’ll know through the open, by whether a probed resistance is maintained or rejected. Regardless, be careful not to dismiss that post-open indication, especially if the overnight rally is maintained despite yesterday afternoon’s sellers having gained traction and having been only minimally productive before the close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2763.50 would be likely to trigger the 2759.00 bias-up signal at 10:15. Exiting the open under 2757.50 would be unlikely to trigger bias-up. Exiting the open above 2768.75 would be likely also to exceed the 2765.50 bias-up target through 10:15 to renew the bias-up signal.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2756.25 | 2759.00 |
| …would target | 2762.75 | 2765.50 |
| Bias-down: under | 2742.75 | 2745.75 |
| …would target | 2735.50 | 2738.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET 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)
Wednesday night’s Globex reversal setup had told us already at the open that Thursday morning would behave bearishly. The morning did trend down sharply to attack 2750.00. The balance of the session ranged widely, correcting up to 2763.50 and then making two narrower swings in the range. The pattern formed a Symmetrical Triangle.
The last downleg from 2761.50 fell to the Triangle’s uptrending support at 2753.00. And broke lower to 2748.00. A couple of similar swings ended the day, closing back above the morning’s 2750.25-2751.50 lows, testing the Triangle’s uptrending support.
That wasn’t very satisfying. Not the morning, which was extremely well done. But the afternoon sellers gained traction in a way that usually trends down aggressively through the close. Trending down was aggressive, but brief, and held the range.
Regardless, sellers are credible for resuming the decline Friday, perhaps already gapping down although that’s not required after having gained traction. Avoiding fresh afternoon lows might have suggested otherwise, that the Globex reversal setup’s bearish behavior was limited to the morning. But maybe not. Otherwise, gapping up above 2763.50 or at least quickly recovering it may be the only bullish scenario going into the weekend.
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))
Probing the already tested 1.1625 target overnight down to 1.1582 was limited to gapping down and then rallying through Thursday morning. The gap back up to Monday’s 1.1700 close was filled, as was likely at some point. Closing above 1.1710 would start to signal momentum reversing up, but back under 1.1670 could put into play a retest of Wednesday night’s low.
Gold Aug Contract (GC, ETF: (GLD))
Trending down $11 overnight was already firming into Thursday’s open, and improved further through the morning to 1271.00. None of which is accumulative, but the bounce has room up to 1276.00 just as noise.
Silver Jul Contract (SI, ETF: (SLV))
Eking out only slightly lower lows down to 16.20 overnight continued to outperform Gold, and only traded narrowly around unchanged Thursday. The gap back up to Monday’s 16.45 close and “higher prior lows” there could be tested just as noise.
30-year Treasury Sep Contract (US, ETF: (TLT))
Probing back under the 143-16 buy signal overnight to attack 143-00 was recovered entirely before Thursday’s open, and intraday action bounced slightly. But there is no new signal or implied strength from the leg.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping back down Thursday to Wednesday’s low also retested Wednesday’s gap-fill of Tuesday’s 64.90 close. It held again, and the 65.65 buy signal was retested. OPEC headlines continued to permeate the environment, and would make closing beyond either signal initially suspicious until confirmed the following day.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday’s gap up essentially filled the gap back up to last Friday’s 3.02 close. That still wasn’t greeting the EIA report from a position of strength, since the upside attraction was now neutralized. In fact, the knee-jerk reaction to EIA was a collapse back down to 2.95. That also filled the gap back down to Wednesday’s close, so any bearish scenario should develop without further delay of valid.