Posts by Rod David
The First Trade & Pre-open Tour Recording… Yep, that left a mark.
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…
Monday’s open immediately signaled the morning’s trend would be down, by opening back under the earlier low of an overnight session that had probed the prior session’s high. Bouncing into resistance at 2871.00 was reversed to test 2855.00. Coinciding with Friday morning’s highs offered support to launch a bounce into the afternoon that tested 2868.00. But it failed to trigger bias-up, and the balance of the session slid again. Testing 2852.00 before the close had time to react back up above the morning’s low.
Overnight action’s new info…
Yesterday’s drop resumed overnight. Flat-to-lower choppiness through the Globex open eventually collapsed sharply to 2831.00 before midnight. That area is also Thursday afternoon’s last relative low, which now serves as support. Already retracing up to what is this morning’s 2845.50 bias-down target — which acts as resistance from below — a narrowing consolidation developed into and out of Europe’s opens.
If, then…
Monday’s very late bounce was probing back above the morning’s low within 3 minutes of the cash session close. So, sellers didn’t gain traction for their efforts. The bounce didn’t recover a prior high, so buyers didn’t gain traction on the bounce. This context for last night’s drop allows it to be briefer before recovering. Briefer, within the other context of yesterday’s opening signal being likely to persist into this morning. Recovering further pre-open would still encounter resistance at 2848.00-2850.50 which must be recovered just to indicate that sellers still aren’t gaining traction for their efforts. Otherwise, the gap back to Thursday’s 2840.00-2841.00 close may be a last line of defense before this downleg becomes something more substantial.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2848.00 would be likely to trigger the 2850.75 bias-down signal at 10:15. Exiting the open under 2841.00 would be likely also not to recover the 2845.50 bias-down target by 10:15 which would renew the bias-down signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2861.75 | 2862.50 |
| …would target | 2867.75 | 2868.75 |
| Bias-down: under | 2849.75 | 2850.75 |
| …would target | 2844.75 | 2845.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| NEW! Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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)
Monday morning’s slide was signaled before the open, which was greeted under the Globex session’s 2873.50 earlier high at 2865.75. It was also signaled after the open, by triggering bias-down under 2866.25. Its target was soon met at 2860.25, and probed by 6 points down to 2854.50. Exiting the bias environment at or above its 2860.25 target suggested that sellers weren’t gaining traction for their effort. Something that buyers might exploit.
They did. And they didn’t.
Bouncing a cumulative 14 points through the noon hour to 2868.25 wasn’t enough to trigger the afternoon’s bias-up signal. The bias environment slipped 10 points. The balance of the session collapsed 12 points to 2852.00. But was it too late to be strong-handed selling sponsorship?
It was, and it wasn’t.
A very late bounce was probing back above the morning’s low within 3 minutes of the cash session close at 3:57. Sellers didn’t gain traction for their efforts. But probing doesn’t equate to recovering, so buyers didn’t gain traction on the bounce.
Having trended down into the close, gapping up above the afternoon bias environment’s 2867.00 high could form a “session-long rally” setup. The reward for either would be to retest Friday’s 2973.25 high and fill its closing gap, probably retest Sunday night’s 2878.50 “new Globex trend extreme” intraday, and possibly fulfill Friday’s requirement for another new trend high close. An overnight test of 2848.00 would have to be isolated to avoid a deeper meltdown.
- 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 gap down is in-line with the Head & Shoulders top that had formed through Friday’s bounce. A temporary correction down to 1.2365 or 1.2305 is now in-play so long as bounces hold 1.2460 before a last probe of new highs can develop.
Gold Feb Contract (GC, ETF: (GLD))
Thursday night’s dip had held the rally’s 1345.00 pullback limit and wasn’t threatened intraday Friday, which maintained the 1368.50 target. But Sunday night’s renewed selling probed deeper, extending the pullback to attack “lower prior highs” at 1335.50. Regardless, at least the gap back up to Friday’s close and potentially 1368.50 remain in-play so long as the pullback doesn’t close under 1328.50.
Silver Mar Contract (SI, ETF: (SLV))
Sunday night’s retest of the rally’s 17.30 pullback limit jeopardize the upside momentum. Already having tested its 17.72 target to within a penny doesn’t help to attract sponsorship for holding the pullback limit. But already extending lower Monday to test 17.10 may have expended more energy than sustainable without a bounce.
30-year Treasury Mar Contract (US, ETF: (TLT))
The pattern extended down to fresh lows Sunday night, now leaving a gap above that may help to encourage a recovery when the decline has finished. At least another fresh low remains likely, and retracing it sufficiently before Friday’s jobs report could form a bottom.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s dip into Monday morning tested the 64.95 pullback limit. Closing above last Thu-Fri 65.37 low suggests the pullback will hold, and back above 66.05 would resume the rally targeting 67.15.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Gapping down Monday was in-line with expectations for not extending the rally without a somewhat brief yet deeper correction. Yet, the drop immediately began recovering and filled the gap back up to Friday’s 3.18 close. The pattern’s timing is difficult at this point, but at least another new recovery high close remains likely.
Mid-day Update… Taking the edge off.
Morning drop loses steam.
This morning’s drop ultimately extended down to 2854.50. It found its low at Friday morning’s “lower prior highs.” Its reaction up began exiting the bias environment back above its 2860.25 bias-down target. The noon hour’s entry tested 2860.25 from a bigger bounce.
That was more than enough to suggest the morning’s sellers were fulfill, and their drop failed to gain traction. This doesn’t necessarily default to reversing up, but it is constructive to a recovery. Buyers must still gain traction, which they narrowly avoided by triggering noN-bias at this afternoon’s 2866.25 bias-up signal.
Bouncing through the noon hour had extended up to 2868.25 before dipping 4 points. Any lower would start to suggest sellers were trying again. Otherwise, exiting the afternoon bias environment at 2:30 in rally mode would next target a retest of last night’s 2878.50 highs.