Posts by Rod David
The First Trade & Pre-open Tour Recording… Still optimistic.
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…
Thursday wasn’t likely to trend unless trending was established early. Which wasn’t likely, when greeting the open unchanged from Wednesday’s 2880.00 close. But the open soon surged to 2885.75, neutralizing the required gap-fill back up to Wednesday’s 2884.75 open above all prior trend highs. Bias parameters created an attraction below at 2872.50, which was tested down to 2871.00 during the noon hour — recovering before the noon hour’s exit. Trending was unlikely, and the trending attempt failed. So the balance of the session gravitated to the range’s earlier upper-end at of 2884.50.
Overnight action’s new info…
As if trying to rekindle the magic of Tuesday night, a favorable China trade headline at 8:00 ET triggered a surge. Tuesday night’s reaction had surged 13 points and extended to 21 points, probing fresh highs. Last night’s surge 7-point surge didn’t probe fresh highs, and didn’t extend. At least, not yet. Europe’s opens touched Wednesday’s 2889.25, which didn’t require being touched.
If, then… (notes to accompany the Tour recording)
Bouncing back to yesterday’s opens wasn’t required yesterday, so that qualifies as last-minute optimism. Probing yesterday’s highs overnight is more last-minute optimism, too. Both can prove bearish from a contrarian perspective. Touching Wednesday’s high overnight or only piercing it without complexity doesn’t reflect strong-handed sponsorship. So, resolving up this morning would likely put into play the next higher objective at 2902.00. Meanwhile, favorable knee-jerk reaction to the news could fail be reversed back down before having a chance to resolve up this morning. Finally, this being a Friday, reacting in either direction — initially or ultimately — would be vulnerable extending into the afternoon.
First Trade…
[Click here to view the Bias parameters] There are no preliminary indications ahead of an Employment Situation report.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2881.00 | 2884.75 |
| …would target | 2888.25 | 2892.00 |
| Bias-down: under | 2870.00 | 2874.00 |
| …would target | 2862.75 | 2866.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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)
Thursday’s session had one job. It wasn’t even required to be done that day. 
Wednesday’s 2884.75 open above all prior highs in a trend required a retest from below. Greeting the open unchanged from Wednesday’s close quickly surged to 2885.75, where the gap-fill was done.
Reacting down avoided triggering the bias-up signal, instead putting into play a test of the 2872.50 bias-down signal. The noon hour’s 2871.00 low met it, twice. And recovered before the noon hour’s exit. Not surprisingly, not yet trending beyond the range by noon was unable to trend afterward.
Trending is not a job for the session prior to the Employment Situation report.
Greeting an entire afternoon from the range’s lower-end, and unlikely to trend any lower, the balance of the session was likely to bounce. Which it did, back to the range’s upper-end at 2884.50. Bouncing that high wasn’t required, so we’ll interpret it as last-minute optimism — which can be bearish from a contrarian perspective.
Resolving up anyway tomorrow morning would likely put into play the next higher objective at 2902.00. A favorable knee-jerk reaction to the news would still be vulnerable to reversing back down through the session.
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 Jun Contract (EC, ETF: (FXE, UUP))
Thursday’s reaction down from Wednesday’s test of the 1.1322 prior high continued forming a inverted Head & Shoulders. Maintaining its symmetry would require breaking higher into the weekend. Otherwise, fresh lows down to 1.1225 would be likely, and would be a likely spot to launch a recovery leg.
Gold Jun Contract (GC, ETF: (GLD))
Wednesday’s narrow sideways ranging gapped down Thursday to 1291.30 and probed under it to test 1285.00. Recovering back up to 1291.30, having gapped down to it and not under it, allows a rally to begin without delay if triggered by Friday’s Employment Situation report.
Silver May Contract (SI, ETF: (SLV))
Thursday’s gap down through the 14.90-14.95 prior lows extended to 14.85 while retesting the open’s gap, and before reversing up sharply back above the prior lows. Closing negative kept alive enough pessimism that any knee-jerk favorable reaction to Friday’s Employment Situation report would be credible for triggering the 15.15 buy signal and extending higher into the weekend.
30-year Treasury Jun Contract (US, ETF: (TLT))
Although Wednesday’s test of the 147-17/147-25 pullback limit didn’t extend down Thursday, neither was it rejected, not even back above its 148-02 bounce limit. So, Friday’s Employment Situation report is being greeted from a position of weakness. A favorable knee-jerk reaction has room up to 148-16 before suggesting that a recovery has begun anyway.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s test of the 62.00 pullback limit was probed by another dime ahead of Thursday’s open, which bounced back up toward recent highs. Now closing under the pullback limit’s 61.90 retest would trigger at least a preliminary sell signal.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Neutralizing the attraction back down to Friday’s 2.66 close on Wednesday had avoided greeting Thursday’s EIA from a position of weakness, but a position of strength before or after the report had required closing above 2.72. The negative knee-jerk reaction probed fresh lows down to 2.63, which must be recovered into the weekend to even begin reversing momentum up.
Mid-day Update… Settling in.
Pre-payrolls paralysis.
Sponsorship is difficult to generate on the afternoon prior to the Employment Situation report. 
And this morning’s bias objective is met — an offsetting test of the 2872.50 bias-down signal, for having held a test of the 2881.75 bias-up signal.
Having become “unfinished business,” 2872.50 was a candidate for this afternoon’s bias-down signal. And its test held to avoid triggering. So, this is a no-bias environment.
Bouncing back up to or toward this afternoon’s 2884.00 bias-up signal wouldn’t be trending, but noise in the range. There’s potential anyway up to 2881.75 and 2883.50. Any higher would suggest a retest of yesterday’s 2889.25 highs.
But there’s not currently any unfinished business above, and a couple of failed attempts to break lower when sponsorship would have been strong-handed. Back under 2873.50 could get a benefit of the doubt for extending to 2866.00, but probably not durably.