Posts by Rod David
Post-open Review… Not so fast, there.
Gap up extends too late to be credible.
The open’s gap up to this morning’s 2949.00 bias-up target only touched 2850.50 before dipping. The dip stopped 1 tick short of touching yesterday afternoon’s 2846.25 bias 
environment high, whose break would have rejected the early strength.
So, early strength isn’t being rejected early? Not necessarily. At least, not decisively enough to default to being bullish. While the gap up was ultimately maintained through the opening 15 minutes of volatility, it didn’t extend. But neither was it rejected, so sellers weren’t marginalized.
Not until after 9:45 were overnight highs probed up to 2852.75. Regardless of the opening pattern, maintaining the recovery above this morning’s 2849.00 bias-up target would have renewed the bias-up signal. Then a very last-minute 4-point spike down probed under 2849.00 by 1 point just in time to prevent renewing bias-up.
If this sounds like a lot of contradicting indications, that’s because it’s a lot of contradicting indications. The offsets undermine each other, and make trending in either direction difficult. So does this: Since 3 of the first hour’s 5 15-minute checkpoints overlapped the same relevant level (2849.00), this is a “dry cleaners morning” which is unlikely to trend.
Breaking beyond either end of a 2848.25-2851.75 range would be credible for trending in that direction. Its upper-end is being pierced now, to touch an unconfirmed fresh high at 2854.00. This is still a bias-up environment, albeit having failed to renew. And there is room down to the 2843.75 bias-up signal until the bias environment comes within view of lapsing.
The First Trade & Pre-open Tour Recording… Do you feel lukcy?
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…
Wednesday night’s rally didn’t only gap up into Thursday’s open. It gapped up into an increasingly bearish pattern of early strength being rejected early. The pattern differed Thursday only in its early surge having come pre-open, a news headline’s knee-jerk reaction up to 2853.75. Regardless of the accelerated timing, it was already snapping back down into the open, which immediately neutralized the “unfinished business above” at Wednesday’s 2848.00 open. The first half-hour’s collapse retested overnight lows down to 2933.75 and bounced again to attack 2848.00. Apparently, that strength was early enough to be rejected down to new lows at 2830.75. So early, that even that drop bounced 9-10 points to close at 2840.00-2841.00, almost flat on the day. But still too late for the late bounce to prevent sellers from gaining traction for their efforts.
Overnight action’s new info…
Thursday’s late bounce had extended through the close, and through the Globex open up to 2847.00 before midnight. Narrow ranging through Europe’s opens finally broke higher to recently test 2852.00. A pullback is now testing what is this morning’s 2849.00 bias-up target as support.
If, then…
Patterns don’t go on forever and repeat endlessly. It’s not uncommon for a series to contain 5, 6, 7 observations of the same behavior. And the 2-week long rally since the last 3-day weekend already contains 4 obvious early rejections of early strength. But a couple of others could qualify. So, I know what your thinking — especially with another gap up indicated this morning… Did this pattern of rejecting early strength early already run its course? Will this gap up be maintained through the open to reject yesterday afternoon’s sellers having gained traction? That could combine quite bullishly with a quasi “session-long rally” setup and Friday morning biases tending to persist through the noon hour. Or, is there at least one more early rejection of early strength left in the chamber? Whether through the open, or after a post-open surge, another ambush by rejection awaits. Well, there’s one way to find out… Okay, maybe two ways. Either extend higher through the open and above any resistance encountered during those first 15 minutes of volatility, or else exit the open trending down and preferably back under 2843.00. Punk (With apologies to Dirty Harry).
PROGRAMMING NOTE: Friday’s Market Wrap will be held at least one hour early.
REMINDER: There is NO Saturday Review this weekend AND next.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above at least 2845.50 would be likely to trigger the 2843.75 bias-up signal at 10:15. Exiting the open above 2851.00 would be likely also to exceed the 2849.00 bias-up target through 10:15 to renew the bias-up signal next targeting fresh highs.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2843.50 | 2843.75 |
| …would target | 2848.75 | 2849.00 |
| Bias-down: under | 2834.25 | 2834.50 |
| …would target | 2828.50 | 2828.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
PROGRAMMING NOTE: Friday’s Market Wrap will be held at least one hour early.
REMINDER: There is NO Saturday Review this weekend AND next.
Wednesday night’s rally greeted Thursday’s open at Wednesday’s open, instantly neutralizing its required retest. Paradigms suddenly shifted to the current atmosphere of rejecting early highs early. The entire first half-hour trended down to probe under overnight lows.
Bouncing into the noon hour nearly retested the open — which doesn’t require retest, since it wasn’t above all prior highs. Another drop ultimately fulfilled its minimum objective by probing the morning’s low. Bottoming and then recovering back above prior lows through the 3:10-3:20 proxy window drifted slightly higher into the close.
The bias environment lapsed under the noon hour’s low, and the final hour was entered even lower, so sellers gained traction for their efforts. The late bounce refueled them. All of which must be rejected by gapping up Friday to avoid extending down through the morning — if not also into and out of 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))
More USD crashing and ECB’s policy statement took currencies to higher, as the Euro probed its 1.2465 resistance and trended higher Thursday to test 1.2575. It was consolidated, and afternoon comments triggered a USD surge that took the Euro back down to 1.2465. Closing back under 1.2435 would reverse the trend back down .
Gold Feb Contract (GC, ETF: (GLD))
Probing higher after Wednesday’s close came within $4 of testing the rally’s next higher objective at 1369.50. Weakness into Thursday’s open was recovered to attack the morning’s high. A pullback could test 1345.00 without yet reversing the trend down.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday’s rally extended higher after the close to within 1-2 cents of the 17.72 target. Overnight action didn’t probe any higher, and Thursday’s open was greeted in a pullback to 17.45. Its reaction recovered to attack the opening highs. Closing under Thursday’s low would reverse the trend down.
30-year Treasury Mar Contract (US, ETF: (TLT))
Another overnight probe of fresh lows was recovered into Thursday’s open for a morning bounce. The 149-03 bounce limit was attacked again. None of which changes the likelihood for continuing to probe lower, especially so long as the bounce limit holds.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs after Wednesday’s close extended higher overnight to satisfy the minimum 66.05 resistance on the way to the eventual 67.20 target. Gapping up to 66.60 was retraced to fill the gap back down to Wednesday’s ~65.60 close. Probing higher intraday Thursday would confirm the uptrend remains in-play.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s strength didn’t exceed Tuesday night’s highs, or Wednesday’s intraday highs, having become likelier to produce a deeper corrective down before extending the rally.