Posts by Rod David
Post-open Review… Can it hold up?
Isolation setup stakes its ground.
The 2644.00 overnight high had been reversed out of Europe’s opens to retest 2627.00. Retracing 61.8% of the drop suddenly surged to attack 2651.00. Its retest was accompanied by RSIs diverging negatively, triggering a reaction down to test 2642.00.
A very important level.
The attempt to recover yesterday’s range was underway. Rallying into and out of the open attacked 2659.00. It was retraced entirely to retest 2642.00, but only to 2644.00 during the opening 15 minutes of volatility.
The isolation setup had formed. Also, the 2640.75 bias-down signal held its post-open test, putting into play an offsetting test of the 2659.75 bias-up signal. Which has been attacked to within 1 point.
Price action has since ranged between 2642.00–2655.00. The isolation setup’s reward usually isn’t obvious during the morning. But a probe into negative territory must be quickly rejected. Extending to fresh highs remains likely, as does rallying this afternoon, so long as 2639.75 holds as support.
The First Trade & Pre-open Tour Recording… Almost literally: make, or break.
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…
Wednesday night’s drop had already probed fresh lows for the week, which hadn’t happened the two prior sessions. Thursday’s open gapped down 27-30 points to probe under Monday’s 2698.00-2699.00 lows. A post-open bounce finally ended upon touching Monday’s low. and the balance of the morning trended down to 2664.00. Another bounce to 2690.00 also resolved down to 2643.00-2644.00. That met the next lower objective under 2680.00 at 2652.00. Closing under it put into play its next lower objective at 2627.00.
Overnight action’s new info…
Trying both to resume the drop, and to reverse it, and failing at both. Thursday’s drop extended without delay to fulfill its next objective down to 2626.00. Consolidating eventually broke lower and quickly touched 2617.00, but it was recovered almost as quickly as it had formed. This time, consolidating again around 2626.00 reversed up sharply into Europe’s opens and touched Thursday’s late 2643.00-2644.00 lows. It also reversed back to 2626.00. Now another bounce is testing 2639.00.
If, then…
Several important points about price action since yesterday’s close. First, it has met the next lower objective. Second, it is in proximity to yesterday’s range. Third, it has developed exclusively under yesterday’s lows. The first two points allow an Isolation setup to form, by opening back above yesterday’s lows and avoiding negative territory through the open. The third point must be invalidated first, by probing back into yesterday’s range well before the open. An alternative recovery path would continue being governed by pessimism and retest the overnight low, but maintain or re-establish the range when the bias environment had lapsed. Friday Factors could squeeze shorts into the weekend. Nevertheless, dangers loom. Isolation setups can be as bearish as they would have been bullish, if they fail to hold within the prior day’s range. And Friday Factors can cut either way, so buyers can become increasingly inhibited the longer a recovery is delayed. Regardless, this being a Friday, the morning’s bias tends to persist through the noon hour. So, almost literally, make or break. Closing under 2652.00 again Friday would confirm the next lower objective in-play, a retest of the crash’s lows at 2509-2511.00. Support along the way would be influential, but likely only temporary.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2639.75 would be likely to trigger the 2640.75 bias-down signal at 10:15. Exiting the open above 2652.00 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2658.50 | 2659.75 |
| …would target | 2666.50 | 2667.50 |
| Bias-down: under | 2639.75 | 2640.75 |
| …would target | 2627.75 | 2629.00 |
| 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)
Wednesday night’s drop extended to fresh lows just in time to shut the door on a path higher for the open, the Isolation setup. Another path higher was formed by the open blipping down further only momentarily, but its reversal attempt failed. That door was shut, too.
One more path higher has opened by fulfilling the next lower objectives at the three-week old 2652.00 low. A late collapse probed them down to 2642.00, then bounced to 2652.00 before the close. Probing it down to 2627.00-2628.00 and recovering — overnight to form an Isolation setup, or intraday to get squeezed into the weekend — would be the basis. Either setup is entirely possible and yet not often formed.
Closing under 2652.00 again Friday would confirm the next lower objective in-play, a retest of the crash’s lows at 2509-2511.00. Support along the way would likely be only temporary. Being a Friday, the morning’s bias tends to persist through the noon hour. So, almost literally, make or break.
- 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))
Holding Wednesday’s bounce at the 1.2390-1.2410 bounce limit didn’t prevent probing higher overnight to test 1.2465. But that excess had disappeared by Thursday’s open, which extended back down intraday to 1.2365. Closing any lower would confirm the corrective bounce had ended, so long as 1.2390-1.2410 continues to hold as resistance.
Gold Apr Contract (jUN , ETF: (GLD))
Rallying ahead of Wednesday’s FOMC news and extending sharply higher after it as nonetheless retraced to test 1325.50 at Thursday’s low. At least closing back under it was needed to reinstate the downside momentum. Now closing back under 1319.00 is the nearest signal.
Silver May Contract (SI, ETF: (SLV))
Probing sharply higher into and out of and after Wednesday’s FOM events was retraced back down Thursday to test 16.40 down to 16.33. Just closing under 16.55 prevents launching a new upleg, and allows another close under 16.40 to resume the decline.
30-year Treasury Jun Contract (US, ETF: (TLT))
Ending Wednesday’s volatility at 143-16 continued to prevent sellers from gaining traction for their third consecutive daily effort. Gapping up more than 1 point Thursday through Monday’s 144-20 close was the consequence. It extended to probe last week’s 145-06 highs intraday, but the resistance held. Its reaction down to “lower prior highs” at 144-22 also held. Closing beyond either end of that range is likely to extend in that direction.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Confirming Tuesday’s breakout Wednesday now requires at least an eventual third higher close. Meanwhile, testing 65.00 created potential for reacting down. The 64.25 pullback limit was tested, with room down to 62.70 before undermining the near-term likelihood of resuming the rally to 66.85.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Wednesday’s reversal extended down slightly deeper Thursday. The behavior can’t yet be considered “ineffectual optimism” for approaching its 2.62 target with such a slow pace, but it doesn’t contradict the ongoing likelihood for breaking through it by at least a dime.