Posts by Rod David
Post-open Review… Cautionary tail risk.
Warning shot across the open’s bow.
If you’ve only caught every other blog post lately, or even every third, or fourth, then you still probably know my criticism of this leg of the rally. That is, ongoing optimism ahead of today’s tax reform vote(s).
Finally, some semblance of defensive posturing arrived at the open. Pre-open action had twice touched yesterday morning’s 2698.00 high. It was never pierced, and the 2697.25 opening print added only a single tick, only a single tick short of touching this morning’s 2697.75 bias-up signal, before collapsing to 2690.00.
Triggering no-bias after touching the bias-up signal would have put into play an offsetting test of the 2688.75 bias-down signal. One wasn’t touched, so the other isn’t required. Regardless, a lower low has now attacked 2688.75 to within 3 ticks, so it wouldn’t become unfinished business, anyway. Also, simply returning down to 2692.50 already makes 2688.00‘s test likely.
So, fresh session lows remain likely so long as 2693.25 isn’t recovered. I’ll also anticipate a test of 2688.00 to recover 2292.50 through whatever timing window it’s tested, or else a more substantial downdraft may be underway already. And back above 2695.50 would signal that a probe of fresh highs is underway targeting 2699.75-2700.75 or 2703.00.
The First Trade & Pre-open Tour Recording… Treading water lightly.
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 was greeted by Sunday night’s relentless rally. If overcome by sellers through the open, then it would reverse the trending back down. Not being overcome by sellers often resumes the overnight trending, although that’s not required. In fact, the 2692.50 open surged to 2698.00, much of which was maintained through the open. Despite absorbing sellers, the rally did not resume. But it was maintained, as the balance of the session ranged choppily sideways. Only the last of several intraday dips even touched the 2692.50 open, which a bounce largely retraced by 2-3 points into the close.
Overnight action’s new info…
Extremely narrow ranging never measured as much as 2 points, until Europe’s opens triggered a surge back up to Monday’s 2698.00 high. That’s the most influence by Europe’s opens in awhile, if not their only influence in awhile, and it was still limited. Touching 2698.00 has reacted back down to the earlier overnight range’s 2696.00 upper-end.
If, then…
Never probing above yesterday morning’s high was surprising. At least one attempt was credible before getting diffused by noon hour noise, and stopping 1 tick short. Such restrained optimism could be constructive to maintaining the uptrend. But being at new highs, and being ahead of a weighty event like today’s tax reform vote, the restrained optimism suggests that buying pressure waning. The rally is expending its optimism in anticipation, leaving less to expend in reaction. Regardless of buying pressure waning, the pattern should still include at least a probe above yesterday morning’s high to 2699.75-2700.75 or 2703.00 before a deeper downdraft. Then the next question would be how deep of a downdraft. I’m assuming deep, because I’m also assuming the anticipation for today’s vote has maintained the rally artificially. Preventing a defensive, constructive downdraft to develop organically can make its eventual appearance compensate for the delay by dropping more substantially. And the seasonally bullish Christmas halt is leaving less time available, making a downdraft likely to be steeper.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2699.75 would be likely to trigger the 2697.75 bias-up signal at 10:15. Exiting the open u9nder 2692.50 would be unlikely to trigger bias-up.
Phonetic dictation…
good morning and welcome it’s Tuesday it’s time for Tuesday’s Morning Market or we’ve got Christmas trading halt coming up that is as of Friday’s close no open on Sunday night or Monday until the regular Monday evening Globex open every met up now just to point out travel maybe even Thursday to some degree on its own it just happens naturallyI would not be as complete of a pattern at the top here at the high here otherwise so I continue to look for at least a probe about yesterday’s highs before a durable downdraft would be as credible as it could be otherwise alright other markets so this influence is down trending influence on copper is remains influential I’m really only identifying a level here that’s of significance not really seeing a pattern that has gray predictive Powers gold firming higher it’s already got to confirm break out and play that struggling to of 8350 with likely resistance of 77 to 1850 silver that suggesting is 1665 and play the 61.8% of the uptrend of the rally that led to the would be the or likelyso would need to recover the clothes back above Friday’s close if it were to go to that extent in order to view that bullishly at that stage but the important thing is it yesterday closed about 271 so doing that at this point would be from a position of strength that’s a position and then basically go on a day tripany questions please go ahead and post them in the chart room and I’ll see you there before the open good luck today
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Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2694.50 | 2697.75 |
| …would target | 2700.00 | 2703.00 |
| Bias-down: under | 2685.75 | 2688.75 |
| …would target | 2680.50 | 2683.75 |
| Signal status: NO-BIAS | 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)
Sponsorship of relentless overnight trending tends either to be overcome through the open, or not. One But extending the overnight trend isn’t required. Monday’s gap up wasn’t overcome through the open, so the session could have extended higher, even though it did not.
Such restrained optimism could be constructive, but at new highs I suspect that buying pressure is waning. Similar to Monday not being required to extend higher, waning upside doesn’t require reversing down. This is more of a re-positioning window. And probing any higher would be vulnerable to failure.
Probing higher before trying to reverse down would be distributive, testing 2699.75-2700.785 or 2703.00. Dipping overnight to 2688.00 could neutralize sellers to enable fresh highs. But breaking under 2688.00 without yet probing above Monday’s high is unlikely to trend down.
The path among those levels will diminish or deplete the excessive optimism ahead of Tuesday’s weighty event, the tax reform vote. Of course, there’s more influencing the market than that, but it probably won’t seem that way into and out of passing the vote, or the vote’s delay, or its failure.
- 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 up and the morning’s follow-through retraced 61.8% of the week-ending reaction down from having retested the 1.1930 sell signal as resistance last Wednesday (basis Mar). The bearish scenario requires no further corrective bounce, and would have difficulty absorbing it. So, not already reversing back down Tuesday could default to a more bullish scenario.
Gold Feb Contract (GC, ETF: (GLD))
Probing fresh recovery highs Sunday night all but confirms an objective is in-play at 1283.50, with some relevant resistance at 1277.50-1280.50. Closing back under 1255.00 would at least require a new buy signal to trigger.
Silver Mar Contract (SI, ETF: (SLV))
Friday’s close was still overlapping 16.05, so probing higher overnight only increases the requirement for a fresh close to confirm the recovery underway is next targeting 16.65. Closing back under 15.90 would all but invalidate the upside momentum.
30-year Treasury Dec Contract (US, ETF: (TLT))
The week was greeted with essentially a confirmed breakout yet to be fulfilled by at least a third eventual higher close. Sunday night’s pullback persisted through Monday morning, especially as any value to its “flight-to-safety” feature wasn’t needed.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing higher Sunday night tested the 57.40 bounce limit, but reversing down into Monday’s open and through the morning attacked the 56.80 sell signal already in-play from having been broken last week.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Gapping up Sunday night to probe back above last Wed-Thu’s lows does help to confirm their indication that the decline’s momentum was already waning. The gap back down to Friday’s 2.61 close should still be filled before a durable rally can begin, preferably filled from a close above 2.71 which would be a position of strength.