Posts by Rod David
Post-open Review… Staking out a claim.
Pre-open surge’s post-open extension fails.
Like yesterday, the session began optimistically, and rewarded buyers for taking early action. The overnight rally had been hovering above yesterday afternoon’s 2793.50 highs, while stopping pessimistically short of yesterday’s late 2797.00 high. The pre-open CPI report triggered a knee-jerk reaction up to 2804.00-2805.00. It was retraced entirely.
Recovering into and out of the open probed fresh highs at 2807.00. Although the 2794.75 bias-up signal triggered easily, the 2802.50 bias-up target exceeded long enough to renew the bias-up signal. Now the 2794.75 bias-up signal is being tested and retested as support.
Being a bias-up environment, 2794.75 should define the window’s lower-end. Back above 2797.00 and 2799.00 would signal the dip was done and momentum is reversing back up. Otherwise, like yesterday, another bias-up decline may be underway.
The First Trade & Pre-open Tour Recording… Tanned, rested, ready.
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…
Closing Friday above 2758.00 and 2770.00 had put into play the next higher targets at 2813.00 and 2830.00-2833.00. A last opportunity to reject that premise was to immediately reject the higher close. Sunday night probed Friday’s late 2792.00 high up to 2805.50 which Monday’s open attacked up to 2802.25. That fulfilled the morning’s bias-up target, and the balance of the session ranged flat-to-lower, twice testing 2784.00 as support. The morning’s 2793.50 bias-up signal defined the afternoon’s upper-end. A late 13-point surge to 2797.00 exited the position-squaring window falling back into the range at 2787.50, a 61.8% retracement of the afternoon’s range — natural support.
Overnight action’s new info…
Narrow ranging around 2787.50 ended before midnight and has since rallied steadily. Two hours of consolidating at the overnight highs has formed an Ascending Triangle. Hovering pessimistically short of yesterday’s late 2797.00 high is threatening to open back above Friday’s highs.
If, then…
Monday’s NQ closed higher, ES closed flat, and YM closed lower, leveraging Friday’s similar relationship to confirm a bullish context. Yesterday morning’s drop developed during a bias-up environment, its sellers being weak-handed because the context precluded them from gaining traction for their effort. Quickly recovering or opening back above Friday’s 2792.00 high and yesterday afternoon’s 2793.50 highs should help to crystallize this morning’s focus on extending the rally. Any early indication of NOT recovering through the open would be more vulnerable to extending yesterday’s pullback with room down to 2770.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2797.25 would be likely to trigger the 2794.75 bias-up signal at 10:15. Exiting the open under 2791.50 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2789.75 | 2794.75 |
| …would target | 2707.75 | 2802.50 |
| Bias-down: under | 2780.75 | 2785.50 |
| …would target | 2769.75 | 2774.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
Before even triggering Friday morning’s 2793.50 bias-up signal, its 2801.75 bias-up target had been fulfilled. Reversing back down through the signal came too late to reject its recovery, let alone to reverse momentum down. That didn’t prevent probing lower anyway, but only by weak-handed sponsorship.
The balance of the session was resisted by 2793.50, even a late surge to 2797.00 that had begun 13 points lower. The position-squaring window’s exit fell back into the range at 2787.50. Being a 61.8% retracement of the afternoon’s range, it is natural support.
A deeper pullback Tuesday can’t be discounted. There’s room down to 2770.00 before even suggesting that sellers are retaking control. Otherwise, the next higher 2813.00 objective remains in-play. Meanwhile, note that NQ (NDX) closed higher, while ES (S&Ps) closed flat, and YM (Dow) closed lower — we discussed this complex relationship during the weekend’s Saturday Review, and Monday’s extension of that relationship is bullish.
- 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 shallow gap down within Friday’s range didn’t resume Thursday’s steep drop, and only firmed back up to the 1.2345 sell signal that had triggered on Thursday.
Gold Apr Contract (jUN , ETF: (GLD))
Overnight weakness was late to develop but produced a gap down Monday to the 1320.00 area. Its support has been chipped away enough to break lower Tuesday to confirm downside momentum remains intact. Otherwise, much more delay in extending down would suggest a retest of 1335.00 is likelier.
Silver May Contract (SI, ETF: (SLV))
Gapping down Monday to 16.50 and holding 16.55 as a bounce Monday doesn’t reinforce the open’s selling pressure. Reversing down now requires closing under 16.40 support which had been thoroughly tested and chipped away Friday.
30-year Treasury Jun Contract (US, ETF: (TLT))
Friday afternoon’s 143-10 resistance was probed further throughout Monday, back up to 143-16 and 143-21 that had were never broken decisively. Almost any delay in another downleg Tuesday would be likely to test 144-06 resistance next.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
An overnight test of 62.25 stopped short of testing the 62.50 buy signal. But the bearish pattern needed to decisively reverse back under the 61.35 bounce limit that Friday had recovered. Monday morning’s plunge to 60.67 tried, but the session ended back up at 61.35.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
The two-day blip-up to 2.81 and two-day retracement back down to the blip-up’s 2.75 origin have defined a range of resistance. Monday’s gap up Monday pierced the upper-end, which ultimately held through the close.