Posts by Rod David
The First Trade & Pre-open Tour Recording… Noisy night, but not trending.
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…
Friday’s last 45 minutes ultimately bounced. And not a little, rallying 13 points in 3 distinct legs. But the late surge to 2673.00 originated from fresh session lows at 2660.00. The session until then was an ongoing series of lower lows and lower highs, beginning from unchanged at 2693.00. And its intraday downtrend persisted through the afternoon bias environment to fulfill day-one of a bearish WedEX setup.
Overnight action’s new info…
Sunday night’s gap up to 2683.00-2685.00 immediately extended Friday’s late bounce. And then it immediately ended. Consolidating back down to 2673.00-2674.00 repeatedly had stopped short of filling the gap back to Friday’s 2671.50 close. Finally probing lower through Europe’s opens only got to 2666.50, which is already reacting back up to unchanged around 2673.00.
If, then…
Having been influential Friday afternoon, WedEX should be very influential Monday morning. That doesn’t preclude gapping up or down, however sharply, before the post-open influence takes over. Neither does it prevent opening flat. Meanwhile, optimism at Friday’s low — stopping short of an outstanding gap around 2658.00 — is persisting overnight. Opening above 2685.00 would have suggested that something has changed dramatically, and that’s not currently indicated. But pre-open or post-open action selling should soon become aggressive if the ongoing optimism is bearish from a contrarian perspective.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2677.50 would be likely to trigger the 2675.50 bias-up signal at 10:15. Exiting the open under 2662.75 would be likely to trigger the 2665.50 bias-down signal.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2676.00 | 2675.50 |
| …would target | 2682.00 | 2681.75 |
| Bias-down: under | 2665.75 | 2665.50 |
| …would target | 2656.75 | 2656.50 |
| Signal status: 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)
Friday’s last 45 minutes ultimately bounced. And not a little, rallying 13 points in 3 distinct legs. But the late surge to 2673.00 originated from fresh session lows at 2660.00. And even the bounce didn’t interrupt the ongoing series of lower lows and lower highs to maintain the downtrend.
So, the bearish WedEX was influential Friday afternoon, which means it should be very influential Monday morning. That doesn’t preclude gapping up sharply before the intraday influence takes over. It doesn’t prevent gapping down or opening flat, either.
Meanwhile, Friday’s low stopped optimistically short of filling an outstanding gap in the 2658.00 area. It’s less likely to hold a later test. Or, at least, unlikely to be recovered without probing under it decisively. Otherwise, while it’s too late to invert WedEX, opening above 2685.00 would suggest that something has changed dramatically.
Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO MARKET WRAP THIS WEEKEND DUE TO TRAVEL. CHARTROOM WILL RE-OPEN SUNDAY EVENING WITH GLOBEX.
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 probe under the 1.2390 pullback limit tested the 1.2340 sell signal down to 1.2300, then recovered to the 1.2340 signal. Recovering the 1.2390 pullback limit could serve as a buy signal at this stage.
Gold Jun Contract (GC, ETF: (GLD))
Despite recovering Thursday’s test of 1344.50 back above 1347.25, Friday dipped deeper to test 1337.00. Buyers lose traction by closing under 1344.50, which must be recovered Monday morning to isolate Friday’s dip.
Silver May Contract (SI, ETF: (SLV))
Dipping overnight to test 17.05 was recovered into the open. Friday’s session spent exclusively in negative territory without extending down qualifies as “ineffectual pessimism” which would make any initial strength Monday bullish.
30-year Treasury Jun Contract (US, ETF: (TLT))
Only a very brief, shallow bounce preceded Friday’s extension down to 143-04, 20 ticks under Thursday’s close but less dramatic than was possible following Thursday’s deep drop. Regardless, the requirement for at least a third lower close is fulfulled.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Dipping Friday to 67.50 was recovered to test Wednesday’s 68.45 high. Closing above it could have signaled the pullback from 69.50 had ended. Extending higher Monday would now require gapping up, or else the reaction down is likely to extend.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Thursday’s break under 2.70 wasn’t rejected Friday, but it was retraced, almost back up to 2.75 resistance. The break remains valid and in-play, so long as 2.75 isn’t recovered, and likely to resolve down to 2.52.
Mid-day Update… Influence back-pedaling.
Bearish morning bounces into otherwise bearish afternoon.
This morning’s drop extended down eventually 24 points to attack 2668.00. An 11-point bounce resolved down during the noon hour to test 2665.00. Its reaction up was still overlapping this morning’s low going into the bias environment. The 2671.25 bias-down signal was still being overlapped, too. Downside momentum needed to rest.
Now that rest should be ending. No-bias triggered late, and the 2671.25 bias-down signal has defined the bias environment’s lower-end. A bounce to 2677.00 is drifting back down as the bias environment comes within view of lapsing. The bias-down signal no longer need hold as support.
More so, the bias-down signal’s support should break lower. The bearish WedEX should start influencing price action down. Back under 2670.00 would signal that momentum is reversing down, with potential to trend down through the close.