Posts by Rod David
Post-open Review… Paradigm shiftiness.
Pre-open slide puts the session on defense.
I recorded this morning’s Market Tour while the 2727.00 overnight high’s retest was reacting down several points. The reaction became a steep slide down to 2712.00. 
The open held its bounce potential up to 2718.50-2719.25 before finally reversing back down to the 2712.00 pre-open low.
But rather than fall off the cliff, surge retested 2719.25. The 2715.00 bias-down signal had already invoked its grace period, and the surge made no-bias likely. The surge’s catalyst was a news headline that’s likely to be retraced, but not quickly. In fact, late no-bias triggered late.
Or, did late no-bias trigger too early? Only one minute later, the 2715.00 bias-down signal was breaking lower. Hard. One minute earlier would have triggered noN-bias, and 2-3 minutes earlier would have triggered late bias-down. In fact, the 2708.00 bias-down target has been met to within 3 ticks, so even a timely bias-down would leave no “unfinished business below.”
But, what above that late no-bias — and more specifically, what about its offsetting test of the 2725.25 bias-up signal? Late signals aren’t required to meet their objectives. But they become likelier if not rejected. And now 2715.00 is being recovered as the bias environment starts lapsing. It’s an unusual situation, but there’s still a window for upside before this afternoon’s bearish WedEX influence arrives.
The First Trade & Pre-open Tour Recording… Non-starters.
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 morning’s rally repeated Wednesday’s equally doomed attempt, doomed for buyers not having gained traction the prior day. That usually means they don’t try, but in these these past two instance they did. So, despite quickly recovering from a post-open 7-point plunge that probed overnight lows down to 2713.50, the morning bias environment reversed up to touch 2732.00. And despite having touched 2732.00, the afternoon bias environment reversed down sharply to touch 2711.00. A 12-point bounce into the close only pierced positive territory before dipping to attack 2716.00 into the close.
Overnight action’s new info…
A choppy range was able to get back up to resistance, and has converted it into support, but has been unable to get away from it. Blipping-down to retest 2716.00 snapped back up to the late-afternoon bounce’s 2723.00 peak — resistance. Probing gradually higher and higher eventually surged up to 2727.00 through Europe’s opens. No defensive posturing preceded it, which was unusual for this week. Which may explain the quick reaction down to 2720.00. Another attack on 2727.00 is also reacting down, back to 2723.00 — now support.
If, then…
At least it sounds bearish. Ill-timed rallies that doomed them to failure, tests of higher prior lows and prior highs that were rejected back under support, recovered dips that failed to gain traction. But sellers have yet to exploit these upside weaknesses. Yesterday’s rejection of the morning’s fresh recovery high by the afternoon’s complete retracement back down to the morning’s low still closed above Wednesday’s prior low. Although sellers gained no traction otherwise, but they can by proxy of opening weakly enough this morning. But there’s no assurance of that, as bearish WedEX’s influence is scheduled for this afternoon.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2727.25 would be likely to trigger the 2725.25 bias-up signal at 10:15. Exiting the open under 2721.50 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2725.25 | 2725.25 |
| …would target | 2730.50 | 2730.50 |
| Bias-down: under | 2714.75 | 2715.00 |
| …would target | 2707.75 | 2708.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN 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)
All but one of Thursday’s signals attracted reinforcements to exceed their 3-4 minute initial extremes. The exception was the post-open 7-point plunge that probed overnight lows down to 2713.50. Too much, too soon — and during the wrong timing window — to attract reinforcements. The trapped shorts were squeezed back up.
This began a session that offered multiple more instances of weak-handed buying. Their impatience was revealed in temporary steep slopes and ill-timed tests of resistance. The jury is still out on one possible instance of weak-handed selling.
First, a sampling of weak-handed buyers. Holding a test of the morning’s bias-down signal already neutralized upside momentum by fulfilling its offsetting test of the 2725.75 bias-up signal in time to trigger it, but not.
The unlikely morning rally that would be doomed to failure if tried, which tried to its fullest potential at 2732.00, and failed. Intraday tests of downtrending pivotal resistance (see the chart and video) that produced peaks.
Weak-handed selling is possible in the afternoon’s no-bias trending under the 2721.50 bias-down signal. It was doomed to failure like the morning’s extended rally, unless the 2715.00 bias-down target maintained a break. And it broke, with 4 points of buffer down to 2711.00, but was still recovered. The recovery neutralized its attraction above at the bias-down signal retracement, but no more. No reward for the recovery, so no resolution yet.
Meanwhile, Monday afternoon’s prior high held its test Thursday, after Wednesday peaked upon testing the “lower prior highs” of its structure. Reversing down to the interim low held, so I can’t yet say that the bounce’s failure reversed the trend down. And might not say it all, unless and until 2717.25 and 2711.00 break lower.
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))
Wednesday’s confirmation of Tuesday’s breakout still requires an eventual third lower close before bottoming would be credible for reversing up. Thursday’s narrowly ranging “inside day” isn’t itself predictive, but closing above its 1.1862 upper-end after first probing a fresh low under 1.1790 would signal momentum reversing up.
Gold Jun Contract (GC, ETF: (GLD))
Greeting Thursday’s open after piercing fresh lows overnight didn’t find sponsorship intraday, which developed entirely within Wednesday’s range. The “inside day” isn’t itself predictive. But closing above its 1291.50 upper-end — especially if after retesting Wednesday night’s low — would signal momentum reversing up.
Silver Jul Contract (SI, ETF: (SLV))
Firming after Wednesday’s close had tested the 16.45 bounce limit, which extended higher intraday to test 16.50. Not yet resuming the decline at this stage suggests that a bigger or longer-lasting detour is underway. Having just done that, I’m suspicious of there being sponsorship to do it again now. Back under 16.40 would signal the decline had resumed.
30-year Treasury Jun Contract (US, ETF: (TLT))
Having confirmed the breakout requiring at least an eventual third lower close, and already having avoided fulfilling it Wednesday, firming overnight was likely to fail. In fact, Thursday’s open gapped down and trended lower to fresh lows at 140-12 to fulfill the minimum objective. The trend remains down so long as 141-04 isn’t recovered.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Vulnerability to a deep detour below was negated by Thursday’s gap up above the recent extended range. Reversing down now would no longer be only a temporary detour. Meanwhile, gapping up above all prior highs now creates another attraction above at 72.06 to help recover from a dip. Speaking of which, Thursday’s gap up retraced back into the prior range to 71.10, and has room to test 70.85 before suggesting momentum is reversing down anyway.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Wednesday’s dip had stopped short of 2.78 to avoid greeting Thursday’s EIA report from a position of weakness. It was touched by the news’ initially negative knee-jerk reaction, which snapped back up sharply into positive territory. The gap back to Tuesday’s 2.86 open was filled, and held, to avoid signaling a new upleg is necessarily underway.