Posts by Rod David
Post-open Review… Stop me if this looks familiar.
Post-open plunge only erases opening gains.
The overnight range was already flat-to-slightly-higher. The 2587.75 bias-up signal was briefly probed several times. A more obvious effort began within 90 minutes of the open.
That was during the window of vulnerability — i.e. How valid can a breakout be if the entire overnight range was poised but never did so.
So, a fresh post-open high to 2597.50 was reversed down sharply, and a lot. Bias-up didn’t trigger, putting into play an offsetting test of the 2566.50 bias-down signal. Already the sharp reversal has extended down to 2573.50. More important is the fresh low printed AFTER 10:15, which helps to confirm its direction.
Meanwhile, the fresh low is coinciding with obligatory support — that is yesterday’s reaction down into the futures close at 2573.50-2575.00. Its reaction is bouncing to test 2585.00.
Back under 2580.25 and 2577.75 would likely resume the decline. And although a bigger bounce is possible, it’s too late to recover the bias-up signal in time to avoid triggering it.
The First Trade & Pre-open Tour Recording… Calm again, before another storm?
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…
Sunday night’s narrow sideways range could have resolved either way, despite already probing 14 points under Friday’s 2642.00 close. Monday’s plunge tracked the only bearish template in operation at the open. While it fulfilled this leg’s likely objectives of retesting the recent 2796.00-2698.00 and 2585.00 lows, they weren’t required the same day. The late bounce from 2552.00 touched 2585.00 as resistance before backing off 5 and 10 points into the cash session and futures closes. Maintaining its break confirms the next lower objective in-play is 2509.00-2511.00.
Overnight action’s new info…
It’s almost the opposite of yesterday. Monday’s late reaction down from 2585.00 was eventually retraced, and then probed up to 2589.00. But only momentarily, as the balance of the night has been sideways in a 10-point range around 2585.00. Flat-to-higher, slightly, as 2590.00 was just touched, but its reaction is heading back down to 2585.00. The description nearly matches yesterday’s, albeit probing slightly higher instead of slightly lower.
If, then…
The objectives of Monday’s template didn’t have a timing element, and neither does the next lower objective. But duplicating Monday’s plunge on Tuesday would introduce a likelihood of extending down aggressively, perhaps even tracking the 1987-style crash template. The overnight range’s restrained optimism would be bullish intraday if the opening 15 minutes of volatility becomes less restrained and more optimistic. That’s credible, but not the likeliest resolution. Meanwhile, immediate post-open weakness could quickly retrace all of the post-close gains, and still be targeting a probe under yesterday’s lows.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2593.25 would be likely to trigger the 2587.75 bias-up signal at 10:15. Exiting the open under 2576.00 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2586.75 | 2587.75 |
| …would target | 2600.25 | 2601.50 |
| Bias-down: under | 2565.25 | 2566.50 |
| …would target | 2553.75 | 2554.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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)
Compared to how April came in, March went out like a lamb. The Dow was off 840 points at its low. There was no hint of the day’s intent until the opening 15 minutes of volatility had lapsed. And then there was no denying it. Only one bearish scenario was likely for the day, compared to two bullish scenarios. And the bearish scenario was only very bearish. But its objective to retrace recent lows didn’t require being fulfilled intraday, yet it was.
Last week’s 2796.00-2698.00 lows had only temporarily avoided retesting the prior Friday’s 2585.00 low. And the 2585.00 low’s retest of Feb 5’s pivotal low had all but required new lows down to 2509.00-2511.00. All were put into play by Monday’s dominoes, which remained toppled at the close. In fact, a late bounce only touched 2585.00 when recovering it could have undermined near-term momentum.
Now as important as any price is price behavior. A second consecutive intraday plunge on Tuesday would realign the 1987-style crash pattern. Not optimally — that timing has passed — but the template would allow a break under 2509.00-2511.00.
- 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))
Gapping up Monday was retraced entirely to fill the bap back down to Thursday’s 1.2375 low close and to test Thursday’s 1.2350 intraday low. There’s already a confirmed breakout, requiring at least an eventual third lower close.
Gold Jun Contract (GC, ETF: (GLD))
Sunday night’s rally eventually did extend enough for its gap up to 1339.00 and intraday rally to fill the gap back up to last Tuesday’s 1349.50 close. Back under 1339.00 would resume the decline.
Silver May Contract (SI, ETF: (SLV))
Gapping up to 16.40 and probing above it Monday extended through 16.50-16.55 to leave another gap outstanding back down to Thursday’s 16.27 close. Back under 16.40 would put it back into play.
30-year Treasury Jun Contract (US, ETF: (TLT))
An overnight dip greeted the open testing the 146-02 pullback limit, but only briefly before reversing back up and extending to fresh highs testing 147-00. Extending to 147-18 no requires pullbacks to hold 146-08 as support.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s recovery filled the gap back up to last Tuesday’s 65.25 close, which Monday’s open exploited by reversing down sharply through the 64.64 pullback limit to 62.95. And there’s room down to 62.62 before suggesting a deeper detour from the 66.88 objective is underway.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping up above the 2.70 bounce limit Thursday wasn’t a buy signal, and kept the door open to resuming the decline if done aggressively. Monday’s open plunged down to 2.68 and 2.65, closing at or under downtrending resistance to to suggest the decline has resumed, targeting fresh lows at 2.52.