Posts by Rod David
Post-open Review… Sellers still fighting back.
Another failed opening surge.
The 2758.00 overnight high before Europe’s opens was attacked again overnight to within 1 tick. 
Opening at the 2754.75 bias-up signal was retraced back up to within 1 point of the overnight high. But, similar to Monday and Tuesday’s initial surges, the resolution was down.
Not rallying, but dipping during the open would have been constructive to extending the rally. Instead, sliding back under Monday-Tuesday’s highs to 2748.50 has triggered no-bias. An offsetting test of the 2743.75 bias-down signal is in-play.
The most bearish scenario would bounce again, filling the gap back up to this morning’s 2754.75 open before reversing down. Still bearish would be to exit the bias environment breaking under its 2743.75 bias-down signal. Exiting the bias environment above its 2754.75 bias-up signal would be “no-bias trending,” but still credible for probing a fresh high.
The First Trade & Pre-open Tour Recording… Greeting with a gap.
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…
Volatility expanded Tuesday compared to Monday. The 2639.00-2752.00 range was an outside day, that still closed within Monday’s range. And like Monday, price action was centered around 2743.00-2747.00. No “unfinished business” was left outstanding by either session. This is more than enough to qualify as a multi-session range. Another interesting feature shared by the two sessions is their opening surges, and those opening surges being reversed back under the open. Tuesday’s post-open reversal even probed Monday’s low, and still avoided melting down. Buyers gained traction for their effort, but retraced too little to indicate that sellers were done.
Overnight action’s new info…
Where Tuesday afternoon’s rally stopped short, the overnight has stepped in. Globex’s open immediately pierced the intraday high up to 2753.25. That was the afternoon’s bias-up target, and its resistance quickly reacted back down 3 points. The rally soon resumed and extended to 2758.00 before dipping 4 points through Europe’s opens. Now 2758.00 is being attacked again.
If, then…
The market is a clearinghouse of competing influences. Breakouts identify the stronger influences, validated by confirmations and invalidated by rejections. Monday-Tuesday’s multi-session range is the influence of 2743.00-2747.00‘s attraction. Surges above and below its 4-point range are the attempts to shake loose of that attraction. Tuesday’s outside day doesn’t indicate any lesser attraction, because price continually returned to the 4-point range. The attraction isn’t shrinking, but the effort to shake loose of its attraction is growing. Gapping up this morning as is currently indicated remains vulnerable to reversing back down, like Monday and Tuesday’s opening surges. But unless the open takes their reactions back into the Monday-Tuesday range — and preferably back into 2743.00-2747.00‘s range — the breakout can extend intraday to 2765.00-2766.25 — the same aggressive and substantial rally Tuesday afternoon could have produced. The bearish scenario all but requires quickly rejecting the breakout’s sponsorship before it can attract reinforcements. A breakout either way beyond the Monday-Tuesday range would still require confirmation Thursday, more so for a break higher.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 Exiting the open under 2750.50 would be unlikely to trigger the 2754.75 bias-up signal at 10:15. Exiting the open above 2757.25 would be likely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2755.00 | 2754.75 |
| …would target | 2760.75 | 2760.50 |
| Bias-down: under | 2744.00 | 2743.75 |
| …would target | 2736.25 | 2736.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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)
Tuesday’s price action was much more volatile than Monday. Yet they both developed around 2743.00-2747.00. This range is either the temporary probe above prior highs, or else the delayed launch to another upleg. Each probed a fresh morning high before reacting down to probe under the open. And each reaction was largely recovered to attack the morning’s high.
Tuesday’s close was above 2743.00-2747.00, and traction was gained through the bias environment exit and final hour entry. The proxy window undermined the upside traction, but didn’t invalidate it. So, resolving down should be obvious almost immediately Wednesday, before Tuesday’s traction can attract new sponsorship. Otherwise, not extending down would likely produce an aggressive and substantial rally — the same rally Tuesday afternoon could have produced.
Meanwhile, Monday and Tuesday’s sideways range has formed a multi-session range. Closing beyond either end of its range would be a breakout. Closing lower would have support back down to 2736.00. Breaking higher could become a two-day affair.
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))
Monday’s reversal down from its 1.1755 bounce limit gapped down Tuesday to 1.1675. That filled the gap back to Friday’s close, and its natural support helped to launch a bounce back up to 1.1740. Another break under Monday’s 1.1688 low would target the gap back down to last Tuesday’s 1.1550 low close.
Gold Aug Contract (GC, ETF: (GLD))
Another attack on recent lows down to 1293.50 was recovered through the morning to attack 1305.00, filling the gap back up to last Thursday’s close. The attraction above didn’t require being neutralized, but now there is no excuse to further delay breaking under 1295.00 and resuming the decline.
Silver Jul Contract (SI, ETF: (SLV))
Overnight weakness down to 16.37 was recovered back into positive territory to test 16.55 resistance. Closing any higher would have been bullish, but delaying the decline’s resumption is not bearish.
30-year Treasury Sep Contract (US, ETF: (TLT))
Monday’s shallow break under the much-tested 143-20 sell signal was retraced immediately by gapping back up to it Tuesday. The rejection wasn’t exploited by firming any further, as the session essentially fluctuated narrowly around 143-20.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows overnight at 64.22 didn’t extend down intraday. While a buy signal can be calculated at 66.25, it’s too late to greet either Tuesday’s post-close API or Wednesday’s EIA reports from a position of strength. So, a negative knee-jerk reaction down can’t be discounted, or its potential to extend down further.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Last Thursday’s gap up to prior highs under 3.00 had not extended or retraced, not until Tuesday’s opening dip filled the gap back down to last Wednesday’s 2.88 close. It can be tested down to 2.85 before signaling something more substantial underway. Meanwhile, at least one more new trend high close remains outstanding.