Posts by Rod David
Post-open Review… Left on the (overnight) field.
Yesterday’s follow-through limited to overnight probes.
The overnight recovery to 2658.50 touched this morning’s bias-up signal. But it was too early for its rejection or its recovery to be predictive. Nevertheless, its resistance reacted down to greet the open at 2649.00.
Which could have sufficed for a shallow gap down that resolves up. And may yet. But so far the gap down has extended, or ranged flat-to-lower attacking this morning’s 2642.00 bias-down signal to within 1 tick. That’s not an actual test, so the it’s not an actual rejection. In other words, the rubber band wasn’t stretched enough for more than a shallow snap back up.
The reward for upside traction gained yesterday afternoon may be limited to the surge through the Globex open or its subsequent retest. But the reaction down didn’t produce a gap down sufficient to offset that upside traction. So, fresh highs this morning aren’t assured, but backing-and-filling up toward overnight highs could react favorably to this afternoon’s FOMC event. Greeting the event from under 2642.00 would be unlikely to rally.
The First Trade & Pre-open Tour Recording… Anti-subpoena power.
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 was greeted back at the lower-end of its overnight range. The overnight range had still felt the influence and momentum of Monday’s steep decline. Its minimum objective of 2641.50 had been touched earlier overnight but its rejection failed. The next lower objective at 2635.00-2638.00 was met during the open, and its break came within 1 tick of the 2623.00 target at the afternoon low. The bias environment reversed up to recover all of those objectives, and the balance of the session extended to recover positive territory up to 2653.00-2654.00. The rally gained traction for its effort.
Overnight action’s new info…
A tree fell in a forest last night. Globex began like a mirror image of the prior night, immediately extending the late intraday surge to 2658.00, then immediately starting a narrow range between 2654.00-2656.00. That was blind-sided by headlines that Mueller wants an interview. And wants it bad. Like, subpoena in the pocket bad. Not terribly surprising news, but thin volume at that time enabled a 12-point plunge to 2643.50. The balance of the night gradually recovered the original surge’s high up to 2658.50. Another plunge to 2651.00 has quickly retraced up 61.8% and more to 2657.00.
If, then…
Having gained traction for its effort, Tuesday’s recovery was likely to extend higher today, unless the open were to gap down sufficiently. The overnight knee-jerk reaction to Mueller’s big subpoena headline was an opportunity to gap down, but it was absorbed. Its retracement suggests that fresh highs are still intended, at least this morning. The second overnight dip suggests that fresh highs might not be tenable. But yesterday’s traction combined with now recovering two overnight plunges also requires probing higher immediately, or else a post-open plunge becomes likely. The afternoon’s FOMC policy statement’s reaction will depend greatly on what is accomplished this morning.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2660.25 would be likely to trigger the 2658.50 bias-up signal at 10:15. Exiting the open under 2655.00 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2660.25 | 2658.50 |
| …would target | 2667.75 | 2666.00 |
| Bias-down: under | 2643.50 | 2642.00 |
| …would target | 2640.50 | 2639.00 |
| Signal status: NO-BIAS | 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)
Lower volume from global May Day celebrations didn’t interrupt Monday’s decline from achieving its objective Tuesday. The minimum objective of 2641.50 would have sufficed, had its overnight test been isolated by opening back within Monday’s range. But that recovery attempt’s failure put into play 2635.00-2638.00, whose failure targeted 2623.00. All had been tested when the afternoon bias environment was entered. All were recovered when the bias environment began lapsing. And the balance of the session extended higher to recover positive territory up to 2653.00-2654.00, ignoring any anxiousness ahead of AAPL’s post-close earnings. But the positive close was too shallow to confirm the afternoon’s traction must extend higher, although that’s likely so long as Wednesday’s open doesn’t gap down.
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))
The Dollar squeeze continued Tuesday, so the Euro’s inside day Monday resolved down as was expected. The gap down to 12061 will need to be filled from above, but the next opportunity for a bottom would be to fill it after probing back above Monday’s 1.2148 high.
Gold Jun Contract (GC, ETF: (GLD))
Monday’s post-open bounce had failed to gain traction, and now Tuesday’s reversal to fresh lows has confirmed the breakout from a multi-session range. At least an eventual third lower close is required. Meanwhile, the bigger picture is targeting 1294.00.
Silver Jul Contract (SI, ETF: (SLV))
Closing Friday under 16.45 wasn’t rejected by Monday’s bounce. The decline resumed overnight and extended sharply lower through Tuesday morning to fresh lows.
30-year Treasury Jun Contract (US, ETF: (TLT))
Fulfilling the corrective bounce’s likely objectives Monday up to 143-07/143-26 allows overnight weakness to gap down Tuesday and to probe under the 143-07 sell signal that would be triggered through the close. Fluctuating around it intraday was still testing it, and almost any initial weakness Wednesday would be credible for extending down.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s surge was already retraced to “lower prior highs” of last week’s consolidation. Resuming the rally required ending the pullback there, but it didn’t. Fresh lows Tuesday may be on their way to probe under Monday morning’s 67.15 lows to the 66.75-66.80 support that was being attacked with the news originally hit.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Friday’s drop was retraced a little Monday back above the 2.76 bounce limit. Tuesday’s gap up was retraced to fluctuate around 2.78-2.82. Friday’s confirmed break still requires at least an eventual third lower close, which would be difficult if this week’s bounce isn’t rejected immediately Wednesday.