Posts by Rod David
The First Trade & Pre-open Tour Recording… Late turn, or last gasp?
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…
Bouncing overnight had been consolidating for hours around the morning’s 2781.50 bias-up signal. The open didn’t trigger it, requiring the offsetting test of its 2766.00 bias-down signal. Its break into the noon hour soon tested 2750.00, which held another two tests to define the afternoon’s low. An interim bounce to 2767.00 failed to exploit the opportunity to recover 2758.00, let alone 2770.00, which could have signaled this week’s pullback has ended.
Overnight action’s new info…
Two uplegs were interrupted by a drop to fresh lows. The second upleg is hovering around the first upleg’s highs, on the verge of losing patience with not yet breaking higher. Globex began by firming up to what is this morning’s 2759.50 bias-up signal. Almost immediately upon touching its resistance, price collapsed 14 points to probe 3 points under yesterday’s low to 2745.00. That’s the gap from last Thursday’s close, and its support soon reacted up 17 points to test 2762.00. All of that had developed before midnight. Since then, ranging sideways has been supported by yesterday’s 2754.00 close, which is now being retested.
If, then…
Wednesday’s lows probed into the gap between last Thursday’s 2745.00 close and Friday’s 2757.00-2759.00 gap up. Gaps are dense areas of support (or resistance) until chipped away, so it’s interesting that the reactions from the gap were relatively shallow. And it will be surprising if Thursday’s open doesn’t resolve the gap’s test immediately one way or the other. Breaking higher must do more than just recover 2758.00 to even begin reversing yesterday’s close under it — triggering bias-up, if not also threatening the bias-up target, would be more in-line with a morning intending to rally. Otherwise, the next objective below is essentially “lower prior highs” in the 2735.00 area.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2760.00 would be likely to trigger the 2759.50 bias-up signal at 10:15. Exiting the open under 2753.00 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2755.00 | 2759.50 |
| …would target | 2763.75 | 2768.50 |
| Bias-down: under | 2742.25 | 2747.50 |
| …would target | 2735.25 | 2739.75 |
| Signal status: STILL TESTING 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)
Bouncing overnight had been consolidating for hours around the morning’s 2781.50 bias-up signal. The open didn’t trigger it, requiring the offsetting test of its 2766.00 bias-down signal. Its break into the noon hour soon tested 2750.00, which held another two tests to define the afternoon’s low. An interim bounce to 2767.00 failed to exploit the opportunity to recover 2758.00, let alone 2770.00, which would have this week’s pullback has ended.
2813.00 and 2830.00-2833.00 are not in-play. They can be reinstated by another accumulative pattern. Or, Thursday’s open can immediately reject the close(s) under 2758.00 (if not also 2770.00).
Wednesday’s low probed into the gap between last Thursday’s 2745.00 close and Friday’s 2757.00-2759.00 gap up. Gaps look deceptively like air pockets because of no prior trading there. Actually, gaps have more friction because no price action has yet chipped away at it. It’s therefore interesting that probing into last week’s gap didn’t reverse up or collapse through it. So, it will also be surprising if Thursday’s open doesn’t resolve immediately one way or the other.
No WedEX triggered. But Thursday’s open could complete a WedEX setup by proxy. Otherwise, there won’t be any likely bias into and out of the weekend. Which wouldn’t preclude there being bias, only a reliably predictive likelihood.
- 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))
Tuesday’s bounce up to “higher prior lows” from last Tue-Wed at 1.2400 reacted down Wednesday to the originally triggered sell signal at 1.2350, not yet down to the new sell signal at 1.2330.
Gold Apr Contract (jUN , ETF: (GLD))
Relatively subdued and directionless ranging Wednesday has no predictive value, other than to undermine Tuesday’s recovery effort.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s recovery effort wasn’t confirmed by Wednesday’s relatively subdued and directionless ranging.
30-year Treasury Jun Contract (US, ETF: (TLT))
The 144-05 buy signal being tested at Tuesday’s close was almost immediately productive Wednesday on the way up to 145-04. That’s the highest level since early February, and forms a compelling Rounding Bottom pattern, despite having left outstanding two pre-inside day gaps.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 61.35 bounce limit held an overnight test and reacted down sharply again, to the 60.25 prior low again, which held again. The likelier resolution continues to be down, so long as 61.35 holds as resistance.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping down Wednesday to 2.74 confirms that Tuesday’s gap up wasn’t bullish, having held 2.81 prior highs and forming “ineffectual optimism.” But gapping down itself still wasn’t was bearish, having yet to reverse down. So, Thrusday’s EIA isn’t being greeted from a position of weakness.
Mid-day Update… Fallen, and had better get up.
Consolidating under key support.
Having held a test of this morning’s 2781.50 bias-up signal, and offsetting test of its 2766.00 bias-down signal was put into play. It was attacked and tested and eventually probed before the bias environment began lapsing. But it needed to define the window’s lower-end, which was done barely in time to neutralize its attraction.
Then the bias environment exit plunged to 2752.00. Ranging choppily through the noon hour just triggered noN-bias, instead of either triggering or rejecting the afternoon’s 2753.00 bias-down signal. There’s no requirement to extend down, or for the window’s low to be defined.
Meanwhile, the noon hour’s choppy range included resistance at 2758.00. Closing under it would negate any upside put into play by having closed above 2770.00. Holding 2758.00 must then recover 2770.00 with little if any delay to be credible.