Posts by Rod David
Post-open Review… Treading water, in a draining pool.
Recovery to overnight highs is reversed entirely.
Reacting down from the 2616.50 overnight high had touched 2580.50. The 36-point drop was retraced enough to greet the open at this morning’s 2609.00 bias-up signal. 
Several brief attempts to extend higher post-open had eventually probed the overnight high by 2 points. But no reinforcements arrived.
No-bias triggered, putting into play an offsetting test of the 2571.75 bias-down signal. Soon after the first hour had ended, a drop began that soon probed the objective down to 2566.00.
The 2571.75 bias-down signal should define the window’s lower-end before the no-bias environment begins lapsing at 11:30. Breaking under it within 10-15 minutes of then would be credible for extending. Otherwise, probing it earlier would be “no-bias trending” and require at least to retest the bias-down signal as resistance before extending down.
I wrote that last paragraph as the objective was being approached. It was overlapped deeply enough to identify a buy signal at 2575.00 with a minimum 7-point target above. Its quick reaction became almost a 30-point bounce attacking 2595.00.
Being a Friday, the morning’s bias signal should persist through the noon hour. This bounce isn’t very credible. Back under 2582.25 would start to signal that another correction has ended, and resume the decline. The pattern remains intact unless this morning’s bias-up signal were recovered.
The First Trade & Pre-open Tour Recording… Single-digit stranglehold dissolving.
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…
Flat-to-higher ranging off of Wednesday night’s 2645.50 low had reached 2686.00, and started retracing 6-9 points 15 minutes before the Thursday’s open. That more than doubled during the next 15 minutes. A choppy open finally broke lower to fulfill the 2651.00 bias-down target, and the noon hour extended down to 2613.00. the afternoon bias environment’s bounce tested 2645.50 before returning to the noon hour’s low, and the position-squaring window broke sharply lower to 2577.00. The Dow printed a closing loss of at least 1,000 points.
Overnight action’s new info…
Several swings of higher highs and higher lows developed into Europe’s opens. Each leg measured a measly 25 points, give or take, reaching 2617.00 to net a 44-point gain from yesterday’s last-minute low. Europe’s exchanges fell as they played catch-up (or catch-down, as the case may be) with yesterday afternoon’s portion of the plunge. Hovering at the high tried ignoring that for several hours, but recently broke lower about 25 points to 2593.00. Its reaction up to 2607.50 peaked upon testing uptrending support that had defined the series of higher lows. That has now resolved down to fresh overnight lows, within 4 points of yesterday’s last-minute low.
If, then…
A couple thousand points here and a couple thousand points there, eventually we’re talking about a significant move… When I say the market is vulnerable to collapsing into the weekend, I mean that in relative terms. Relative to the two-week old drop. I’ve been describing this week’s multiple two-day setups of expanded selling pressures — beginning last Friday, and becoming more frequent yesterday. Gapping up sufficiently can invalidate the setup’s near-term influence. Either way, Friday Factors are likely to exacerbate a move as the weekend’s illiquidity gets exponentially closer each minute. The potential for collapse is also suggested by the comparison among the three major indexes/averages, which I describe in today’s recording. Gapping up would still need to maintain and extend to prevent another downdraft before the close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2615.25 would be likely to trigger the 2609.00 bias-up signal at 10:15. Exiting the open under 2598.75 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2611.50 | 2609.00 |
| …would target | 2628.25 | 2625.75 |
| Bias-down: under | 2573.25 | 2571.75 |
| …would target | 2557.50 | 2555.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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)
Friday and Monday’s drops did it. Tuesday and Wednesday’s intraday rallies did it. Thursday morning’s two choppy consolidations and their breaks lower did it. And now Thursday afternoon’s last two hours have done it.
Done what? Each of these two sequential setups have expanded their bearish aspects. Their second act — be it an intraday decline, or a rejection of resistance, or distributive range — all measured greater than their first.
Selling pressure is growing, which requires its rejection to avoid capitulation. Rejection is often achieved, by gapping up above a relevant level. This current series seems unable to do that. And Thursday’s two sets extended to sharply lower lows that make it extremely difficult to reject at the next open.
Gapping up sufficiently above a prior high Friday would be credible for reversing the trend up into the close, where Friday Factors could create a bigger rally. Otherwise, those same influences can extend the decline to sharply lower lows into the weekend.
- 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))
Wednesday’s dip back into last month’s 1.2260-1.2300 range was extended to its lower-end Thursday. Still overlapping Wednesday’s 1.2275 close does undermine whether Thursday produced a fresh low close that would fulfill the confirmed breakout.
Gold Apr Contract (GC, ETF: (GLD))
The next lower objective at 1312.50 down to 1309.00 reacted up Thursday to test 1324.50, avoiding a close under 1312.50 that would have put into play much lower objectives .
Silver Mar Contract (SI, ETF: (SLV))
Thursday’s low came within a nickel of touching the next lower objective at 16.15. Its reaction tested 16.60 but didn’t reverse the trend up, so 16.15 remains outstanding.
30-year Treasury Mar Contract (US, ETF: (TLT))
Thursday’s 143-20 low could fulfill the required third lower close in-play from the recent confirmed breakout. The 144-12 prior relative low shouldn’t be recovered first.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 61.50 target that was met and held Thursday was probed Thursday down to 60.60. Back above 62.30 would launch a new rally leg. Otherwise, extending to fresh lows would next target 59.80 and 57.25.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Still ranging narrowly at pullback lows around 2.70 Thursday doesn’t prevent a close back above 2.86 from launching a recovery.