Posts by Rod David
Saturday Review Starts in One Hour…
Be sure to join us by 9:30am ET for this weekend’s Saturday Review. After discussing the bigger picture and gaming out strategies for playing next week’s likelier opening setups, we’ll do instant analysis of any stock charts that you request… See you there!
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2679.50 | 2678.25 |
| …would target | 2685.50 | 2684.25 |
| Bias-down: under | 2663.25 | 2662.25 |
| …would target | 2656.00 | 2655.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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)
“The cart won’t go before the donkey’s hooked up,” as my make-believe Great-great Grandpappy would have said back in the day. Friday he would have said that a rubber band can’t snap until it’s stretched. Which is what happened to the bearish scenario. Or, more appropriately, what didn’t happen to it.
Probing fresh highs Friday above the 2677.00 corrective bounce limit would have been likely to reverse down throughout the afternoon. Fresh highs weren’t probed, perhaps because Thursday’s surge into the futures close did, after all, fulfill the traction gained by its intraday rally. Perhaps the NQ sell-off siphoned the day’s selling pressure, having probed above Thursday’s high before plunging through the afternoon.
Nevertheless, the ongoing test of 2677.00 wasn’t rejected, so fresh highs are still possible. And fresh highs are still vulnerable to reversing down, albeit a little less so. Extending higher would target 2693.00 and 2703.00. Oversold RSIs at Friday morning’s 2657.75 low will require a retest at some point, too.
Details and other markets coverage are discussed in the post-market Wrap recording here.
I’LL EMAIL THE LINK TO SATURDAY REVIEW IN THE MORNING.
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))
Friday’s gap down to test 1.2100 was recovered through the morning to fill the gap back up to Thursday’s 1.2145 close. Friday’s open is under all prior lows, so it will need to be filled before a durable recovery would be credible. An immediate interim bounce has room up to 1.2215.
Gold Jun Contract (GC, ETF: (GLD))
Thursday’s 1316.00 low wasn’t probed Friday, which bounced within Thursday’s range up to 1325.00. There’s room up to 1329.00 while still being likely to resolve down, next targeting 1294.00.
Silver Jul Contract (SI, ETF: (SLV))
[Rolling coverage forward to Jul, which trades at a 5-cent premium to May]… Firming initially Friday touched 16.55 resistance before reversing back down to the 16.45 sell signal. At least a probe lower is now obligatory, while a confirmed break would launch a new downleg. Closing back above 16.75-16.80 — preferably after an intraday probe under 16.45 — would trap this recent weakness and launch a new upleg.
30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday’s bounce was extended overnight to test the 142-25 buy signal, which was probed Friday up to 143-09. Further upside potential up to 143-17 and 144-28 — or just closing under 142-06 — would still be likely to resolve down to 141-04.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extremely narrow ranging around unchanged Friday is already unattractive for trading. Meanwhile, the pattern is developing at its range’s midpoint, making it even more difficult to anticipate the next move’s direction.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Far from being confirmed by a second consecutive higher close, Thursday’s fresh high close reacted down overnight to gap down Friday at 2.80 well under prior highs. Extending down to 2.77 only threatened the 2.76 sell signal, which must still trigger to reinstate the distributive pattern.
Mid-day Update… Making lemons from lemonade.
Difficult to snap back down without first stretching up.
Testing and retesting this morning’s 2661.50 bias-down signal fulfilled the no-bias signal’s requirement for its test. Neutralizing the attraction below creates a vulnerability to reversing up.
So, was its reaction a recovery, or just a bounce? The bias environment exit was still overlapping yesterday’s 2666.25 cash session close — probing above it, and under it. That’s not decisive, so new sponsorship wasn’t exploiting the vulnerability.
Price bounced further anyway, up to 2674.00. But this afternoon’s 2672.00 no-bias signal didn’t trigger, and its reaction is testing 2667.75 support. Its break would have room down to this afternoon’s 2659.25 bias-down signal during the no-bias environment. Back above 2672.00 would target fresh highs — regardless of this being a no-bias environment.
Probing or falling under this afternoon’s 2659.25 bias-down signal is difficult without first having probed prior highs. This being a Friday, exiting the bias environment under a relevant support could simply extend into the weekend. But it’s otherwise difficult to attract new sponsorship Friday afternoon when Friday morning couldn’t attract sponsorship itself.