Posts by Rod David
Post-open Review… Rescued from under the ice.
Another dip recovered.
The 2740.50 bias-up target was probed overnight by more than 6 points. But its reaction down touched 2722.25 before the open. Rallying through the open tested 2735.50, and 
retested it after quickly dipping 8 points and just as quickly recovering.
Probing under the 2733.50 earlier overnight low was recovered in time to be still be tested as the opening 15 minutes of volatility lapsed. It wasn’t rejected decisively, and not for lack of trying. Neither was it recovered decisively. But the few times this setup does appear it tends to be absorbed, and resolve as bullishly as it would have been bearish.
The next reaction fell 10 points to test and retest 2725.75. But that didn’t prevent another bounce from touching the 2732.50 bias-up signal in time to invoke the grace period. It triggered at 10:30, helpfully also probing the pre-10:15 high.
The 2740.50 bias-up target is already met, being probed by at least 1 point. It is resistance, but this is still a bias-up environment which can extend. This being Friday, the morning’s bias tends to persist through the noon hour. And this being expiration, morning setups tend to influence the session.
The First Trade & Pre-open Tour Recording… Floating above thin ice.
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…
The past week has been marked with some meaningful recoveries. They began last Friday afternoon when the morning’s 60-point plunge rallied 110 points. They include Wednesday’s 49-point pre-open CPI-plunge that was retraced during the first hour and reversed up 70 points. Their last instance was Thursday morning’s 29-point drop which then rallied 55 points. The last one began from gapping up, so buyers have grown less patient. Two consecutive afternoons have rallied when they could have afforded to refuel the rally by backing-and-filling, also reflecting less patient buyers. Meanwhile, a second consecutive higher close above 2684.00 makes 2753.00-2757.00 even likelier.
Overnight action’s new info…
The rally has extended higher overnight in two distinct legs. Their reactions suggest a third upleg is needed soon to avoid reversing down. Thursday’s late surge firmed 6 points into and out of the 2732.00 cash session close to attack 2738.00. Then price action narrowed to a 6-tick (ticks, not points) range for several hours. A momentary surge after midnight reacted down to pierce the earlier overnight high down to 2732.50 — keep an eye on that level. A more considered extension to fresh highs attacked 2647.00 and also reacted down, attacking 2736.00. So far, still hovering back above yesterday’s highs.
If, then…
Call it a domino effect. Wednesday’s close above 2684.00 and Thursday’s close above 2698.00-2700.00 have put into play the next higher objective at 2753.00-2757.00. The higher objective seems to be intact and even in-play for today with overnight action trending up and this afternoon becomes yet to be influenced by the bullish WedEX. But be aware that a session-long signal can still invert the WedEX influence. I wouldn’t bother addressing that this morning, if not for overnight action having pierced the earlier Globex low (described above). Exiting the open under it would form the same sell signal that had triggered at the Jan 29 top to point lower through the following morning. At least that instance could have been contained to that morning, but today’s expiration is usually a session-long influence. Otherwise, the bullish WedEX influence could still be greeted lower if those dominoes that point higher test 2753.00-2757.00 early, which could quickly become more like a house of cards.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2744.50 would be likely also to exceed the 2740.50 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2738.00 would be likely at least to trigger the 2732.50 bias-up signal. Exiting the open under 2726.25 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2733.00 | 2732.50 |
| …would target | 2740.75 | 2740.50 |
| Bias-down: under | 2720.00 | 2719.75 |
| …would target | 2710.75 | 2710.25 |
| Signal status: LATE BIAS-UP | FAQ | |
| NEW! 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)
Thursday’s gap up above the morning’s 2713.50 bias-up target could have resolved a lot of ways. Exceeding it in time would have renewed the bias-up signal. Reversing down from it and under the bias-up signal would have targeted both bias-down parameters.
But something in between — like Thursday’s opening pattern — was likely to test the 2703.00 bias-up signal as support and either hold it or recover from probing under it. 
And having probed under it 2788.50, the pattern would likely reward its buyers with a fresh session high above 2717.50-2719.50.
That’s two sizeable moves being signaled before noon, and the session kept giving.
The fresh high promised by the second signal also triggered the afternoon’s 2712.50 bias-up targeting 2725.00. It was probed by nearly 4 points before testing a sell signal down to 2719.50. But fidgety shorts overwhelmed the position-squaring window which surged 10 points into the cash session close and added 3 more into the futures close.
The second consecutive higher close above 2684.00 makes 2753.00-2757.00 even likelier. The WedEX is unaffected and remains intact, likely to influence Friday afternoon and Monday morning bullishly. Meanwhile, a second consecutive afternoon has refused to exploit an opportunity for the rally to rest on its laurels and refuel by trapping shorts, keeping alive the potential for another pullback first.
- 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))
Fulfilling the bounce’s minimum 1.2435-1.2465 target area Wednesday didn’t prevent probing higher overnight and gapping up Thursday to test 1.2540. There is potential for extending to fresh highs so long as 1.2435 now holds as support.
Gold Apr Contract (GC, ETF: (GLD))
Already having fulfilled the minimum 1356.00 objective — i.e. filling its gap above — was extended overnight to attack 1360.00, but Thursday traded flat-to-lower down to the rally’s 1350.50 pullback limit.
Silver Mar Contract (SI, ETF: (SLV))
The rally’s 16.95 target was met at the overnight high, making the pattern more vulnerable to reacting down more obviously. Which the gap down did, extending to 16.60 at session lows. Closing back above 16.70 would reinstate the upside momentum next targeting 17.11.
30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday’s retest of Sunday night’s 143-04 target had originated from a position of strength, so Thursday’s bounce back to what is now the buy signal at 144-12 is starting to suggest a bottom is forming.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs overnight probed the 61.50 bounce limit by a nickel before reversing down sharply to 59.80 support. Its reaction back up above Wednesday’s highs must be the corrective bounce’s peak and launch the next downleg targeting 57.20 to maintain the pattern.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Filling the gap Wednesday back down to Monday’s 2.56 close prevented greeting Thursday’s EIA report from a position of weakness. But its resolution wasn’t high enough to reach a position of strength. A blip-down overnight touched 2.53 but the session only ranged narrowly without resolving either way.