Posts by Rod David
The First Trade & Pre-open Tour Recording… 56? Try 36.
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…
There was nothing near-term bullish about retesting 2767.00 Sunday night and post-open Monday. Having held Friday to launch its intraday rally, its support properties were deleted, and now the decline must extend to test 2756.00. Quickly rejecting the overnight and intraday dip might have avoided the extension, except that the opening 15 minutes of volatility were still holding at or under 2767.00. More at than under, in this case. And that included gapping down through both bias-down parameters, expending a lot of energy. But it created a position of weakness, and any rally it launched would be doomed to failure. The morning rallied back up to its 2778.00 bias-down signal, which the afternoon retested before probing by 2 points through the close.
Overnight action’s new info…
The party got started early last night. A quick retest of the 2780.00 post-close high reacted back down to 2778.00, and then plunged to 2762.50 on the announcement of new tariffs against China. Consolidating back up to 2767.00 plunged again to 2753.50 — possibly on news of China striking back, perhaps in reaction to news that General Mattis is visiting South Korea to reinstate their previously called-off joint drills. Regardless, consolidating around 2756.00 slid another 20 points into and out of Europe’s opens to test 2736.00. Bouncing since then has tested 2751.50.
If, then…
Unless already rejected overnight, the objective of Monday’s late break was to fill the gap back up to Friday’s 2784.50 close, at least 5-7 points higher if not 10. Any higher would have started putting into play the 2796.00 and 2798.00 objectives above. Unless already rejected overnight, which is the case. Exceeding 2756.00 by 20 points does not change the bearish-bullish path described Saturday, that started tracking Monday — to avoid further delay in testing 2756.00 so that selling pressure couldn’t refuel. Buyers didn’t gain any traction for Monday’s bounce, which did refuel selling pressure to a degree. The question is whether that added degree of refueling is being fulfilled by the overnight lows and their intraday retest. The answer will be in whether 2756.00 is recovered through the close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2756.00 would be the best chance at rallying back up to 2767.00, regardless of the resolution from there.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2775.50 | 2779.50 |
| …would target | 2782.00 | 2786.00 |
| Bias-down: under | 2769.25 | 2773.50 |
| …would target | 2763.00 | 2767.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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)
Sunday night’s drop retested Friday’s low — itself, a test of 2767.00 — and retested it after the open. Breaking lower was avoided, but not rejected, as price was still ranging around 2767.00 while the opening 15 minutes of volatility was lapsing. So, it wasn’t rejected decisively, which was enough for rallying back up to the 2778.00 bias-down signal before the bias environment began lapsing.
A pullback to 2770.50 was recovered to 2778.00 when the afternoon bias environment began lapsing, and a pattern was formed. One more shallower dip was recovered to probe fresh highs into and out of the close up to 2780.00.
Unless already rejected overnight, the late break’s next higher objective is to fill the gap back up to Friday’s 2784.50 close. And it’s test would likely be probed by a couple of points. Any higher would start putting into play the 2796.00 and 2798.00 objectives above.
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))
Sunday night’s dip down to 1.1645 probed Friday morning’s low, but still held well above Thursday night’s 1.1620 low. Back above 1.1710 would start to trigger a corrective bounce, but meanwhile a durable bottom has not formed.
Gold Aug Contract (GC, ETF: (GLD))
Bounce potential up to 1284.00 held its tests before and after Monday’s open, trading flat-to-lower through the afternoon, remaining vulnerable to resuming the decline.
Silver Jul Contract (SI, ETF: (SLV))
The 16.65 bounce limit was attacked Sunday night before reversing down into Monday’s open. A momentary fresh low only traded flat-to-lower through the afternoon.
30-year Treasury Sep Contract (US, ETF: (TLT))
Blipping up at Monday’s open was reversed back into negative territory to test 143-16 as support. Holding its test keeps alive potential for recovering 143-24 to resume the recovery.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to Aug which trades at a 15-20 cent discount to Jul]… Sunday night’s bounce came after absorbing lower lows overnight. Extending higher intraday tested the 65.65 buy signal, which can’t afford to delay triggering without resuming the decline.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Rejecting Friday’s breakout is the only near-term path down, and Monday’s gap down and extension back to 2.95 tried. Closing under 2.95 would confirm, but meanwhile closing back above 3.00 would suggest the rally was resuming.
Mid-day Update… Wrong side of the hump.
Morning rally still short of recovery.
The open’s dip to 2761.25 recovered back above 2767.00 too late for its sponsorship to be strong-handed. That didn’t prevent extending the bounce to test this morning’s 2777.50 bias-down signal by 2 ticks. The bias environment finished lapsing back down at its 2772.00 bias-down target.
Bouncing out of the noon hour has held a test of the 2776.75 bias-up signal to avoid triggering. Hovering here until the bias environment begins lapsing can resume the rally and trend higher into the close. Its likely objective would be to fill the gap back up to Friday’s 2784.50 close.
Back under 2773.00 at any time would start to signal another downleg underway. The next lower objective 2756.00, although testing it today would be difficult if not done aggressively. Overbought RSIs at this morning’s 2778.00 high would become another piece of unfinished business above.