Posts by Rod David
Post-open Review… Non-committal.
REMINDER: I’M AWAY FROM THE SCREENS TODAY BETWEEN 11:15-12:45 ET.
Not without trying, this morning has triggered no-bias. And having held a test of the 2719.00 bias-down signal — thorough testing — an offsetting test of the 2725.25 bias-up signal is in-play. Back above 2720.75 would help to confirm its invalidation attempt had failed.
It’s too late to trigger bias-down or to invoke the grace period, but a dip is probing under 2719.00 now by 2 points to try invalidating the signal. Still overlapping it at 10:30 won’t affect the 10:15 signal. Probing lower would be “no-bias trending” requiring its recovery.
But back under 2719.00 cleanly at 10:30 would invalidate the no-bias signal and its upside objective. Fresh lows this morning for whatever reason could still neutralize the 2710.25 “unfinished business below.” Doing it before or into this afternoon’s FOMC to trap weak-handed shorts to fuel a bullish reaction.
The First Trade & Pre-open Tour Recording… Around the block.
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…
Tuesday’s 2720.25 open was flat with Monday’s futures close. Both were above Monday’s cash 2716.25 session close, which had been touched twice overnight. Interim bounces had tested the 2726-2727 target created by Monday’s close above 2711.50. The open pierced fresh highs up to 2729.00, and reversed down again, early enough not to trigger the bias-up signal. The morning’s bias environment exit only got to within 3 points of fulfilling an offsetting test of its 2710.25 bias-down signal. The afternoon bias environment got a few ticks closer. Both dips reacted up, settling at 2723.50. The cash session closed 3 points lower, essentially unchanged from the opening print.
Overnight action’s new info…
Price action since yesterday has been volatile, not narrow, but still undecided. Dipping into Tuesday’s close had triggered a pattern with potential down to 2716.25. It was barely attacked to within 2 points. Firming into the close extended into the Globex open up to 2725.50. Its reaction down to 2721.00 was recovered entirely, and higher to attack 2728.00. A 10-point drop has bounced 6 points off of 2718.00 to now test 2724.00, essentially unchanged from yesterday’s cash session close.
If, then…
While yesterday afternoon’s low provided a sizable bounce, it was contained within the session’s previous range. This reinforces the range’s boundaries for containing noise, by making it more difficult to attract sponsorship for trending out of the range. Greeting the open within the range can still trend quickly to try gaining some traction, which is already difficult ahead of Wednesday afternoon’s FOMC events. The range is wide, so an early trending attempt that doesn’t trigger a bias signal still has plenty of room for reversal before paralyzing anxiousness sets in. But volatility after the policy statement and during Fed Chair Powell’s first quarterly Q&A should help to compensate for the interim constraint.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2627.00 would be likely to trigger the 2725.25 bias-up signal at 10:15. Exiting the open under 2724.00 would be unlikely to trigger bias-up. Exiting the open above 2720.50 would be unlikely to trigger the 2719.00 bias-down signal. Exiting the open under 2716.25 would be likely to trigger bias-down.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2722.00 | 2725.25 |
| …would target | 2730.50 | 2733.50 |
| Bias-down: under | 271600 | 2719.00 |
| …would target | 2709.00 | 2712.25 |
| Signal status: NO-BIAS | 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)
It was a wide range, but a range nonetheless. Tuesday developed almost entirely above Monday’s 2716.25 cash session close, resisted by the 2726-2727 target created by Monday’s close above 2711.50. The morning’s bias left “unfinished business below,” an offsetting test of its 2710.25 bias-down signal. No matter how skeptical we were that it would be tested, and no matter how true that has been, it is an attraction that will need to be tested eventually.
So, was Tuesday’s go-nowhere strength only “ineffectual optimism” ahead of Wednesday’s FOMC events? Possibly, but not enough of it to be very bearish from a contrarian perspective. Overnight and/or morning fluctuations may try to trend beyond either end of Tuesday’s range but probably won’t. In contrast, volatility after the policy statement and during Fed Chair Powell’s first quarterly Q&A could be off the charts — (almost) literally.
PROGRAMMING NOTE: I’LL BE AWAY FROM THE SCREENS BETWEEN 11:15-1:45 ET WEDNESDAY.
- 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))
[Rolling coverage forward to Jun which trades at a 90-pip discount from Mar ]… Monday’s bounce back up to 1.2445 “higher prior lows” held, which Tuesday’s gap down exploited by opening at Friday’s 1.2370 close. Extending down to fresh lows through the day essentially confirms the trend remains down.
Gold Apr Contract (jUN , ETF: (GLD))
Monday’s bounce was too shallow to invalidate Friday’s break, which Tuesday morning exploited by trending down under Friday’s lows. Prior lows down to 1305.00 may still offer support, but it should be just a formality to signal 1291.50 is in-play.
Silver May Contract (SI, ETF: (SLV))
Monday’s bounce was too shallow to invalidate Friday’s break, which Tuesday morning exploited by trending down under Friday’s lows. The nearest bounce limit can be lowered from 16.40 to 16.35.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday’s gap down to 144-00 support was recovered to probe positive territory, but closed essentially flat. Tuesday’s gap down to Monday’s 143-26 open ranged sideways narrowly. The rally has little excuse to further delay resuming, and to avoid extending the pullback down to 143-16.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to May which trades at a 55-cent discount from Apr]… Monday’s intraday dip to “lower prior highs” at 60.70 was recovered to close just under the 61.85 buy signal. Tuesday’s open surged through it and extended to prior highs 62.80. A second consecutive higher close Wednesday would confirm 65.00 is in-play.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Monday’s break under 2.70 support was recovered into Tuesday’s open, hardly fulfilling the minimum 2.65 downside objective, let alone attacking it. But it remains in-play and outstanding, nonetheless.