Posts by Rod David
Post-open Review… Above a rock and a hard place.
Overnight drop finds post-open buyers.
My last comment before the open was that it’s being greeted not between a rock and a hard place, but above it. 
The overnight dip to 2704.50 had bounced back to 2711.00, where a post-open surge touched 2714.00. Overlapping dips up to 2716.25 eventually broke higher to 2721.25.
That’s right. Yesterday’s low. Natural resistance.
Overlapping the 2718.50 bias-down signal in time to invoke the grace period ultimately retraced it to trigger late bias-down. Already, its reaction down is 2 ticks away from fulfilling room for a retracement down to 2711.00.
Holding an intraday test of 2704.50 would be a lot more bullish than avoiding its test altogether. Recovering 2717.00 through the close would be a lot more informative than the open. More predictive, too. Meanwhile, the 3-day holiday weekend’s influence doesn’t even begin until today’s close.
The First Trade & Pre-open Tour Recording… Follow-through.
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…
Tuesday’s open stretched the rubber band. Just a little, immediately fulfilling the morning’s 2741.50 bias-up target. Then it snapped back down. Just a little, filling the gap back to Monday’s close, which was at the upper-end of last Monday afternoon’s 2725.00-2732.00 consolidation. That stopped short of retracing the entire overnight rally. But the afternoon bias environment’s exit at 2737.50 made up for the delay, sliding through the close down to 2721.50 support. Bouncing through the close touched 2727.25 resistance, but didn’t recover it.
Overnight action’s new info…
Extending down without delay was likely, as we discussed at yesterday’s close. Satisfying an objective but not yet retracing its last support (or resistance) tends to invite reinforcements. Last night’s action fulfilled this setup, eventually resuming the decline to test fresh lows at 2717.00. Bouncing ahead of Europe’s opens (NO defensive posturing) resolved down sharply, resuming the decline to 2704.50.
If, then…
2704.50 is an important area. Its test formed the week-old low that ended the prior drop from 2741.00. Now yesterday’s retest of 2741.00 has formed a Double Top, making the 2704.50 area its interim low. After correcting the pattern with a drop targeting 2675.50-2677.25, the rally often resumes. Not always — a Double Top can be durable. Resuming the rally before fully probing the Double Bottom’s interim low can make its eventual top more durable. The downside can quickly unfold if post-open bounces hold Thursday-Friday’s 2712.00-2713.00 “higher prior lows” as resistance. Otherwise, any bullish scenario at least requires recovering 2717.00. Meanwhile, the impending 3-day holiday weekend’s seasonal bullishness (i.e. flat-to-higher influence) makes today THE day for bigger money to position during maximum liquidity. So, holding or breaking the interim low’s test today would likely dictate price action into the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2711.00 would be likely also to exceed the 2713.00 bias-down target through 10:15, renewing the bias-down signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2728.00 | 2727.75 |
| …would target | 2734.50 | 2734.25 |
| Bias-down: under | 2718.50 | 2718.50 |
| …would target | 2713.00 | 2713.00 |
| Signal status: LATE BIAS-DOWN, BIAS-DOWN 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)
Just closing at the upper-end of last Monday afternoon’s 2725.00-2732.00 consolidation made follow-through Tuesday likely. So long as the overnight didn’t dip, which it didn’t. 
But already trending up relentlessly throughout the night added an extra requirement that fresh highs be immediate. And immediate fresh highs must immediately attract reinforcements to avoid being rejected.
Tuesday’s open only made the rally even more difficult to extend, by immediately fulfilling its 2741.50 bias-up target. And then holding it. The reaction down was immediate, as was the low it made upon attacking 2732.00.
Suddenly, nothing else about the session was immediate.
Choppiness through the afternoon touched a buy signal at 2737.50 as the bias environment began lapsing. It was the session’s last sign of strength. The balance of the session slid sharply through support after support — the afternoon’s 2730.50 bias-down signal, 2725.25-2727.25, and finally touching 2721.50.
Most of the late reaction up to 2727.25 began after coming to within 3 minutes of the cash session close. The late drop’s selling pressure was satisfied, but no relevant resistance was recovered. Extending down without delay is likely, unless Wednesday’s open were to gap up above Tuesday afternoon’s 2738.50 high.
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))
Overnight strength tapered off ahead of Tuesday’s open. Intraday narrow action hovered narrowly above Monday’s lows, not rejecting the overnight strength, and contributing to a potential bottom. Closing above 1.1845 would signal momentum reversing up.
Gold Jun Contract (GC, ETF: (GLD))
Monday’s recovery had stopped short of recovering the 1292.00 buy signal, which was probed overnight. Tuesday’s gap up was retraced to test 1292.00 as support. The lack of durable follow-though suggests the decline’s momentum remains intact. But closing above Tuesday’s 1296.00 high could extend the bounce.
Silver Jul Contract (SI, ETF: (SLV))
Friday’s opening dip and Sunday night’s deeper dip both were recovered intraday, which Monday night’s rally extended to test 16.63-16.65 resistance. Closing any higher would be problematic for the bounce to remain only a correction, so Tuesday’s reaction down helps to maintain the likelihood for resuming the decline.
30-year Treasury Jun Contract (US, ETF: (TLT))
Still overlapping the 141-04 bounce limit Monday night persisted through Tuesday. A retest of last week’s 140-14 is likely until 142-02 is recovered.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to Jul, which trades at a 5-10 cent premium to Jun]… Monday’s session long rally to fresh highs bobbled only slightly overnight ahead of Tuesday’s open, which extended initially to probe fresh recovery highs above 72.80, before collapsing back under 72.00. The pattern is still targeting 74.15–74.20.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Monday’s dip had only attacked the 2.78 sell signal. Tuesday’s gap up to the 2.85 prior high extended higher to probe fresh highs up to 2.90. Pullbacks must now hold 2.88 to maintain the next higher objective at 2.95.