Posts by Rod David
Post-open Review… Held up.
Another post-open slide recovered.
Yesterday’s open was attacking the overnight highs and immediately began backing-and-filling.
Its dip held support (a late-morning offsetting test of its bias-down signal) and recovered through the afternoon.
Today’s open was also attacking its overnight highs and also immediately began backing-and-filling. Its dip has already held support (the first half-hour’s touch of the 2875.50 bias-up signal), and also already recovered to and through overnight highs.
The open had touched the rally’s next higher objective at 2885.00, but 2779.00 had maintained its recovery through 9:45 to make the bias-up signal likely to be triggered a half-hour later. Triggering bias-up put into play its 2882.25 bias-up target, regardless of having been tested already post-open. Also likely was a retest of the 2886.25 overnight high’s “new Globex trend extreme.”
All of which is being probed up to 2889.00. Its too late to trigger the renewed bias-up signal targeting 2902.00. But exiting the bias environment above 2885.00 would likely target it, anyway. Not maintaining the probe above 2885.00 would not put into play 2902.00, and could start more backing-and-filling.
The First Trade & Pre-open Tour Recording… China, for the save.
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…
Monday’s rally to test prior highs up to 2869.00 — didn’t extend Tuesday beyond Monday’s 2873.50 intraday high. The morning’s bias signal triggered a reaction down to 2862.25 that met and held its pullback objective, qualifying as backing-and-filling. The balance of the session rallied back up to 2873.50. A very last-minute reaction collapsed back under 2869.00 to 2867.00 through the futures close. The upper-end of the distributive range held, and pushed back twice, but never reversed the trend back down.
Overnight action’s new info…
Tuesday’s last-minute collapse had triggered a sell signal targeting 2866.00, which was met at the Globex open. Sideways ranging held its retest, perhaps thanks to China trade headlines that triggered a couple of surges up to 2882.25. The two surges formed complexity that creates a “new Globex trend extreme” requiring intraday retest, often the same day. A shallow consolidation back to 2878.00 recovered through Europe’s opens up to 2884.00, but only briefly as 2880.00 is being tested as support.
If, then… (notes to accompany the Tour recording)
Fresh highs were possible regardless of their resolution, even if only temporary to stretch the rubber band so it can snap back down aggressively. Whether to 2779.00 or up to 2885.50, there was no requirement to be met before reversing down, but the China trade headlines have injected an optimistic bias. Zerohedge is criticizing the mechanical reaction for ignoring the remaining disagreement on implementation and enforcement, which may be true. But if these levels don’t reinstate the two-week old distributive pattern, then not reversing down would next target 2902.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2779.00 would be likely to at least trigger the 2875.50 bias-up signal at 10:15. Exiting the open above 2885.00 would be likely also to exceed the 2882.25 bias-up target at 10:15 to renew the bias-up signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2871.50 | 2875.50 |
| …would target | 2878.25 | 2882.25 |
| Bias-down: under | 2861.75 | 2866.00 |
| …would target | 2854.75 | 2859.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | . | |
| 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)
Monday’s rally to prior highs didn’t extend Tuesday. Neither was it rejected. The morning qualified as backing-and-filling, the pause that often consolidates outsized moves before resuming them.
But trying to resume the rally failed. Trending up to touch the 2873.75 high, which had pierced Monday’s late high, then a last-minute collapse back under 2869.00 to 2867.00 through the futures close.
Fresh highs are possible regardless of the resolution, even if only temporary to stretch the rubber band so it can snap back down aggressively. Whether to 2879.00 or to 2885.50, a probe of fresh highs is either the likely reward for not having reversed the trend back down Tuesday, or the room for noise where strong-handed selling resumes. A bullish and a bearish path, both beginning with fresh highs.
An alternative bearish path would not first probe fresh highs, but instead exploit Tuesday’s chipping away at support to start breaking lower without delay. So would an alternative bearish path, with room down to 2866.00 before required to accelerate. A bullish and a bearish path, both beginning with a pullback.
Potential bearish setups could form before Wednesday’s open. Tuesday’s last-minute dip was too late to negate having trended up into the close, so gapping down under the 2868.50 afternoon bias environment low (regardless of Tuesday’s post-close break under it) could form a session-long decline. Probing fresh highs overnight wouldn’t require retest if already reversing down under earlier Globex lows for a Globex-flip. But the potential bullish setup should not only resume the rally, but at an accelerated pace.
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))
Tuesday didn’t delay probing fresh lows under the 1.1278 target that was met Monday. The fresh low was shallow before bouncing to test Monday’s “higher prior lows” as resistance. The target’s slow approach, its immediate influence, and now its quick attraction from above, all suggest that optimism remains too high from a contrarian perspective for a bottom to be credible.
Gold Jun Contract (GC, ETF: (GLD))
Tuesday’s retest of 1291.30 was its first intraday test, and needs to hold for a recovery above 1302.00 to signal the trend reversing back up. Closing any lower would instead suggest the pullback is extending.
Silver May Contract (SI, ETF: (SLV))
Gapping down Tuesday probed Thursday’s 14.95 low by a nickel before bouncing back into positive territory. Closing above 15.10 would signal momentum reversing up. Otherwise, closing under 14.95 would now signal a more substantial pullback underway.
30-year Treasury Jun Contract (US, ETF: (TLT))
Breaking under the 149-11 pullback limit Monday allowed room for extending down to 147-17/147-25, which narrow ranging overnight and Tuesday did not try to exploit. Completing the pullback Wednesday would be helpful to greeting Friday’s Employment Situation report from a position of strength.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already trending up into Tuesday’s open extended to fresh highs at 62.50. The rally remains intact so long as pullbacks now hold 61.70 as support. Closing under 60.50 would reverse the trend down. But Wednesday’s EIA report is being greeted from a position of strength, that might not react favorably initially, but should provide an anchor to recover a knee-jerk reaction down.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Trending back down Tuesday attacked Friday’s 2.66 low close, which should at least be filled, if not also probed before establishing a durable bottom. Otherwise, closing back above 2.75 would still get a benefit of the doubt for already reversing momentum back up.