Posts by Rod David
The First Trade & Pre-open Tour Recording… Stiffed resistance.
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…
An overnight Symmetrical Triangle’s false break was already reversing back up pre-open from 2559.50. Wednesday’s open extended the reversal more substantially, all but ensuring the overnight plunge would not resume. It did not. Sellers were never actually marginalized intraday, but they would be influential again only during the noon hour’s exit into the bias environment, dropping from 2620.00 to 2601.50. That ended abruptly as the rally extended sharply higher to almost 2650.00 into the final minutes. The actual cash session close held 2644.00.
Overnight action’s new info…
Slowing the pace of yesterday’s rally hasn’t stopped it. A reaction down from 2660.00 to 2653.00 was recovered to 2667.00, which also reacted down to 2653.00. Its recovery to 2660.00 is forming a potential Head & Shoulders pattern, and also reinforcing the relevance of 2660.00.
If, then…
Extending any higher would seriously undermine the near-term downside momentum, especially if maintained through today’s close. Significant retracement limits are being tested, both at yesterday’s close back under 2644.00 and at the overnight probe above 2660.00. Closing above both today would enable a higher objective at 2722.00. Meanwhile, having tested 2660.00, closing back under 2644.00 could act as an accelerant to reverse momentum down aggressively into the weekend — and out of it… Meanwhile, the potential Head & Shoulders pattern forming overnight has yet to break lower, and may not. Regardless, its intraday influence will be defined during the opening 15 minutes of volatility.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2660.00 would be likely to exceed the 2656.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2650.00 would be likely at least to trigger the 2647.50 bias-up signal at 10:15.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2646.25 | 2647.50 |
| …would target | 2655.25 | 2656.25 |
| Bias-down: under | 2637.50 | 2638.50 |
| …would target | 2628.75 | 2629.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
Any opportunity to reinstate the 1987-style crash template had all but disappeared at Wednesday’s open. The overnight Symmetrical Triangle’s false break down was reversing up more substantially, instead of extending the overnight plunge.
That didn’t foreclose upon potential to reverse down less aggressively into the afternoon, but the rally extended instead. Ultimately, 90 points off the 2559.50 overnight low and testing 2650.00 was probing above Monday’s 2638.00 high.
The recovery of dropping from last Thursday’s high barely exceeded its 2644.00 bounce limit’s room for noise at the close. But the limit was holding before coming within 3 minutes of the cash session close. The similar bounce limit has yet to be met at 2660.00, where retracing the entire last downleg from last Tuesday’s high could still be only temporary.
So, extending any higher would seriously undermine the near-term downside momentum. And it would suggest a longer delay in at least retesting the lows down to 2509.00-2511.00. Almost any immediate weakness Thursday would be credible for extending down into and out of the weekend.
In case you missed it earlier, click here for a quick video description of how the overnight Symmetrical Triangle offered guidance and confidence to being long.
- 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 Mar Contract (EC, ETF: (FXE, UUP))
Wednesday’s reaction up held a test of 1.2365 whose recovery would reverse momentum up, and leave no unfinished business below since Tuesday’s fresh low close already fulfilled it. The trend otherwise remains down.
Gold Jun Contract (GC, ETF: (GLD))
Gapping up Wednesday to retest 1348.00 up to 1352.50 was reversed back down to 1339.00, whose break would start to signal the recent rally had failed and momentum is reversing down. Not following-through Thursday could marginalize sellers to allow another rally leg.
Silver May Contract (SI, ETF: (SLV))
Gapping up slightly was reversed back down to and through 16.40 to 16.28. A second consecutive lower close on Thursday would confirm the recent rally had failed, and that fresh lows are in-play.
30-year Treasury Jun Contract (US, ETF: (TLT))
The gap back up to Monday’s 146-26 close was only attacked Wednesday up to 146-18 before testing Tuesday’s lows down to 145-18. A pullback still has room down to the 145-00 area while still being likely to recover and at least fill the gap back to 146-26 .
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s gap down under 62.50 and test of 62.05 doesn’t require being retested, despite being left outstanding after recovering back above the 62.62 pullback limit. Having said that, only filling the gap back up to Tuesday’s ~63.45 close without closing higher can’t afford to hesitate extending the recovery Thursday.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Extending the bounce back above 2.70 to 2.74 was retraced a little before Wednesday’s close, enough to avoid greeting Thursday’s EIA report from a position of strength, but not to be in a position of weakness.
Mid-day Update… More to come?
Plunge’s retracement hasn’t actually reversed.
Reversing more substantially than the overnight false break did get to this morning’s 2595.00 bias-up signal. It was probed during the bias environment, but ultimately touched one last time as the bias environment came within view of lapsing. Extending higher into the noon hour attacked 2620.00 to within 2-3 ticks.
That was the minimum objective for extending any higher. It neutralized the overbought RSIs at yesterday’s high. And this afternoon’s 2620.00 bias-up target is essentially met to prevent creating “unfinished business above.”
There’s no requirement for the balance of the session to trend either way. But unless 2620.00 is exceeded — and preferably soon — then the pattern remains vulnerable to retracing much of all of this morning’s recovery.