Posts by Rod David
Post-open Review… Prepping for one more jump.
Probe of overnight lows recovers, at least.
One more bounce back up to this morning’s 2807.50 bias-up signal had held and returned to the overnight lows’ test and retest under 2801.00. 
Disappointment was obvious in the market’s deign not to greet the open gapping up. The retail crowd needed to express that same opinion, so a probe under overnight lows became likely.
But the open’s blip-down barely touched the 2799.75 overnight low before reacting up. Reacting up into positive territory at 2806.50 wasn’t likely to extend, as a probe under overnight lows remained likely.
Finally, the open’s choppy range broke lower. The 2798.25 bias-down signal was only attacked to within 1 tick to avoid invoking the grace period. Probing under it down to 2795.75 was recovered back to 2798.25 in time to avoid invalidating no-bias. A lower low would still be “no-bias trending” that requires recovery, but probably not before testing 2792.00-2793.00.
This is a no-bias environment. An offsetting test of the bias-up signal is not required, since the bias-down signal wasn’t touched during the bias timing window. Backing-and-filling down to 2798.25 is possible, perhaps even a little likely, but not necessary before launching a probe into positive territory this morning or this afternoon.
The First Trade & Pre-open Tour Recording… No follow-through.
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 second act to Tuesday’s 39-point plunge was Wednesday’s 13-point drop into and out of the open. But they didn’t prevent testing the morning’s 2794.50 bias-up signal in time to invoke the grace period. It didn’t trigger, but that didn’t rallying anyway. And rallying, through the morning and afternoon. Tuesday’s 2800.75 open was retested and Tuesday’s high was pierced by 1 point up to 2809.50. Reacting down into the close was the first pullback since the open, and it still fulfilled the only other unfinished business above of a new trend extreme close. Passively bearish WedEX triggered, and the morning’s no-bias trending left unfinished business below at 2772.50.
Overnight action’s new info…
Choppy ranging has neither resumed yesterday’s rally, nor rejected it. Wednesday’s late reaction down was retraced to test and retest what is this morning’s 2807.50 bias-up signal. Fresh lows tested and retested 2800.00, but now 2807.50 is being tested again.
If, then…
Was yesterday’s rally all noise? It was an “inside day” that covered no new ground. Except for its brief, highest point, the entire session unfolded within Tuesday’s range. Attractions above were neutralized without putting into play higher objectives. Only the new trend high close is suspicious since it was under prior intraday highs, but that can be completed by probing fresh highs today — regardless of being maintained through the close. One of the three econ reports scheduled at 8:30 could trigger a surge that gaps up, which would alter yesterday’s WedEX signal. Without already extending yesterday’s late reaction down, fresh highs are likely, and they’re increasingly vulnerable to reacting down even more deeply.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2808.50 would be likely to trigger the 2707.50 bias-up signal at 10:15. Exiting the open under 2803.50 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2805.50 | 2807.50 |
| …would target | 2811.75 | 2814.00 |
| Bias-down: under | 2796.00 | 2798.25 |
| …would target | 2789.50 | 2791.50 |
| Signal status: NO-BIAS | 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)
Wednesday’s opening bar measured more than 2 points, and it overlapped the morning’s 2787.50 bias-up signal. That’s wide. And it was almost 7 points off the pre-open high which had printed not much earlier. Also wide. None of which was arbitrary, as the drop originated from within 1 tick of the morning’s 2794.50 bias-up target. Then the drop became a plunge, extending down to 2780.75. Wide.
The point being that a lot of selling pressure was expended in a relatively brief time frame. An important point, since it was totally absorbed, swallowed whole. Not only retraced entirely, but reversed by at least as much in the opposite direction. And the reversal persisted relentlessly into the final hour. That was quite a rubber band being stretch.
So, absorbing the opening dip was well-rewarded intraday. Not out of the ordinary. Only the wide swings make it unusual, but the ratios were not. “Unfinished business above” was resolved by retesting Tuesday’s 2800.75 opening gap, and ending at a new trend high close. Being within a prior session’s range does make the new trend high close less meaningful, but it qualifies.
Unfinished business below was left outstanding at 2772.50 by the morning’s no-bias trending. Meanwhile, having probed Tuesday’s 2808.50 prior high without closing above it, WedEX triggered passively bearish. Maintaining a gap up to new highs Thursday would change that to actively bullish, regardless of the session’s resolution. Regardless, the influence isn’t relevant until Friday afternoon.
- 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))
Having fulfilled a third higher close requirement Tuesday, an overnight dip gapped down into Wednesday’s open. The entire dip was recovered to fill the gap back up to Tuesday’s 1.2326 high. The trend doesn’t reverse down until breaking under 1.2210.
Gold Feb Contract (GC, ETF: (GLD))
Retesting Friday’s 1344.50 post-close high overnight held again as resistance, reacting down into Wednesday’s open and extending down momentarily to 1331.00. Rallying sharply into the afternoon tested 1341.00, leaving the rally’s momentum intact.
Silver Mar Contract (SI, ETF: (SLV))
Overnight firming was retraced into Wednesday’s open, and slightly lower to test 17.05. Closing back above 17.30 would signal again another probe underway to higher highs.
30-year Treasury Mar Contract (US, ETF: (TLT))
Still holding above 150-16 at Wednesday’s close kept alive the likelihood for a bigger corrective bounce up to 151-26 — although resistance has appeared at 151-16 which could be difficult to recover before resuming the decline.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still ranging flat-to-lower, but not trending down or breaking under the 63.15 pullback limit, doesn’t reject the rally’s momentum. So, despite already fulfilling its 64.75 target, closing above 64.25 could resume the rally to higher highs.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report is being greeted from a position of strength for probing fresh recovery highs. Peaking Wednesday at the 3.29 target does open the door to a corrective dip, but a dip should be only corrective if triggered as a reaction to news.