Posts by Rod David
Post-open Review… No resolve.
Choppy open is contained within choppier overnight range.
The 2600.00 overnight low was retraced steadily to test the 2624.00 overnight highs. Up to 2625.25, whose recovery through the open would have been bullish
. Econ reports triggered blip-up to 2627.00 that reacted back down to attack overnight low.
That was all pre-open, Yet it pretty much describes all post-open action.
Bouncing to the 2621.25 bias-up signal and dropping to the 2606.50 bias-down signal each were probed by a couple of points. On their first time. Retesting he bias-up signal got to 2626.25. Its reaction down retested 2606.50.
Ultimately, no-bias triggered. Having tested both bias signals already, neither requires a retest. But either should define that end of the window if tested.
Should.
The 2606.50 bias-down signal is being probed again now, during a no-bias environment, like yesterday afternoon’s no-bias trending. Which collapsed. And this probe is now testing 2599.00.
The First Trade & Pre-open Tour Recording… Holding pattern.
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…
Nothing about Tuesday’s open was bullish, but, wow. Monday’s rally had closed above Friday afternoon’s prior high which put into play a much higher recovery target. Extending higher into Monday’s close retraced Friday morning’s high, too, but was still overlapping it. Extending even higher overnight was already reacting down into Tuesday’s open. And the opening 15 minutes of volatility was exited back at Friday morning’s high. Tests of both bias-up parameters were rejected. All of which is bearish. And only mildly productive, hardly attacking support at Friday afternoon’s high before trying to recover. That premature optimism can be more bearish than the bearish setups, when the bearish setups haven’t yet been fulfilled. It was followed by an extended optimism which avoided triggering bias-down, but fell anyway — and fell sharply enough to invalidate a required retracement. I was suspicious of that late break’s timing, but it was very productive, anyway.
Overnight action’s new info…
I had noted a 2600.00-2614.00 range before the position-squaring window. Closing within it Tuesday would not be predictive either way. The afternoon’s plunge tested it twice down to 2599.00 and 2596.00, then bounced to 2614.00 at the cash session close. Globex initially fluctuated around the close up to 2624.00. Its eventual reaction down into and out of Europe’s opens touched 2600.00. Bouncing is already retesting the range’s upper-end.
If, then…
Exiting the open beyond either end of 2600.00-2614.00 would be likely to trend in that direction. While there’s no assurance that the upcoming holiday weekend’s seasonal bullishness will be influential, its influence doesn’t begin until this afternoon. Which leaves this morning as optimal for extending the decline, if the decline intends to extend. If the decline does extend to close under Friday’s lows, I would be skeptical that a bullish influence was intended.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2625.25 would be likely to trigger the 2621.25 bias-up signal at 10:15. Exiting the open above 2630.75 would be likely also to exceed the 2628.50 bias-up target at 10:15 to renew the bias-up signal, next targeting 2641.50. Exiting the open under 2614.00 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2620.50 | 2621.25 |
| …would target | 2627.50 | 2628.50 |
| Bias-down: under | 2605.50 | 2606.50 |
| …would target | 2598.25 | 2599.00 |
| Signal status: NO-BIAS, TESTED BOTH BIAS SIGNALS | 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)
Score one for the anti-bias forces Tuesday. Two, actually. No, wait, one. Or none.
The morning’s rejection of both bias-up parameters 2663.25 and 2671.00 had put into play offsetting tests of both bias-down parameters 2648.75 and 2637.75. The morning met neither before bouncing to fresh post-open highs at 2675.50.
The afternoon triggered no-bias without putting into play any objective. But then its 2663.25 bias-down signal broke, too late to trigger, which is “no-bias trending” that requires being retraced. It wasn’t.
So, both bias setups failed.
Except the afternoon’s no-bias trending extended down to test the morning’s 2648.75 bias-down signal and its 2637.75 bias-down target. Also, exiting the afternoon bias environment under its 2655.00 bias-down target invalidated the no-bias trending and its required retracement.
So, both setups… excused?
The afternoon drop extended down sharply to 2598.75 before I had to leave the screens early for the day. I was skeptical at the lateness of breaking under 2655.00, but that now seems more than a little moot. Closing back under Friday afternoon’s 2650.00 high invalidates the next higher objective it had put into play at 2691.00 — which was already undermined by still overlapping 2658.50 at Monday’s close.
The holiday weekend’s bullish influence doesn’t become effective until Wednesday afternoon, so there’s still a brief window that could see sellers do more damage. And that’s assuming the bullish influence isn’t twisted like the two bias setups described above.
- 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))
Monday’s close above 1.2515 prior highs was almost rejected by Tuesday’s gap down under the 1.2480 prior low. But that created a gap back up to Monday’s 1.2530 close, and recovering to close above 1.2480 remains in proximity to filling the gap back up to Monday’s close. Otherwise, closing under 1.2445 would trigger a much deeper reversal down.
Gold Apr Contract (jUN , ETF: (GLD))
It’s premature for gapping down Tuesday to reverse the past week’s rally. That has only created a gap back up to Monday’s 1354.50 close that will want to be filled. However, filling the gap above near-term would remain likely so long as 1341.00 now holds as support.
Silver May Contract (SI, ETF: (SLV))
Closing above 16.65 Monday still needs to recover 16.80 to confirm a new uptrend underway. But like past recent recovery attempts, the upside attempt has been met by gapping down. A sell signal is premature, but not recovering 16.65 Wednesday would start to suggest the next significant leg is down.
30-year Treasury Jun Contract (US, ETF: (TLT))
Another overnight probe under 144-22 — which was a little simpler since Monday’s close was still overlapping it — was followed by another recovery back into the 144-22/145-04 range. Closing beyond either end of the range is likely to extend in that direction, and that resolution is still likelier to be up.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday and Tuesday’s sessions have both ranged narrowly, and both blipped-up momentarily to attack or to pierce 66.00. Not already rejecting the fresh highs makes higher highs likely, presumably to fulfill the next higher objective outstanding at 66.88.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
The bounce from fulfilling the 2.62 objective extended Tuesday to test 2.70, which is essentially the bounce limit to maintain the downside momentum that is otherwise next targeting 2.52.