Posts by Rod David
Post-open Review… Trying support.
Bias-down signal holds multiple tests. And still being tested.
My pre-open update noted that the 2828.50 bias-down signal was unlikely to trigger ahead of FOMC. 
Sponsorship is difficult to generate ahead of an event. It wasn’t even near being tested as the pre-open pullback had tested and retested 2834.00. But a post-open collapse from the 2836.50 open pierced 2828.50.
Its test held, reacting up to 2832.00. As did the next deeper test. One more test after invoking the grace period touched the room for noise down to 2825.25, and recovered enough to avoid triggering bias-down. An offsetting test of the 2842.25 bias-up signal is in-play, but 2828.50 was tested again.
Perhaps the choppiness and delay is the effect of Brexit headlines crossing during the open. But the opportunity for strong hands to have signaled a bearish sentiment has passed, at least until backing-and-filling to resistance, at least with any confidence.
At least a bounce up to 2837.50 remains likely initially, so long as 2828.50 continues holding as support. But only so long, as not yet rallying off of 2828.50‘s tests when the bias environment starts lapsing would suggest that patient buyers are letting sellers have more room.
The First Trade & Pre-open Tour Recording… Big day, big prep.
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…
Rallying sharply Monday night had formed a “new Globex trend extreme” at 2853.00. It also allowed probing fresh highs without relying on intraday sponsorship, which had failed to maintain Monday morning’s highs. Gapping up to 2849.75 ranged choppily sideways until the bias environment came within view of lapsing, then surged 15 points to attack 2859.00 as noon began. Intraday sponsorship did it again, retracing the rally down to 2853.00, then collapsing to 2841.50 on a China trade headline. A bounce to 2852.00 was reversed to fresh session lows through the 3:10-3:20 proxy window to signal a more substantial drop forming. Right into the position-squaring window at 2829.00, bouncing back up to 2840.00 through the close.
Overnight action’s new info…
Volatility is already alive, including a fresh low, and a wide reversal around unchanged. Tuesday’s late bounce had begun retracing back down immediately at the Globex open. The late low was retested by 1 point to 2828.00, essentially this morning’s bias-down signal. A bounce retraced 61.8% up to 2835.50 by midnight, where a consolidation resolved up and extended the bounce through Europe’s opens to 2842.50. That’s essentially this morning’s bias-up signal, and a probe into positive territory, and their resistance has reacted down to 2834.00, and looking at least a little lower.
If, then… (notes to accompany the Tour recording)
No “unfinished business” above, and two consecutive sessions of distribution ahead of this afternoon’s FOMC events, doesn’t prevent rallying. Whether ahead of the event in belief that yesterday’s drop was defensive enough, or in reaction to the event because another bullet is dodged. Regardless, the Fed — and all Central Banks — are in a controversial phase of trying to let rhetoric do their work, all creating a very opportunistic trading environment.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2830.75 would be unlikely to trigger the 2828.50 bias-down signal at 10:15. Exiting the open under 2838.50 would be unlikely to trigger the 2842.25 bias-up signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2836.75 | 2842.25 |
| …would target | 2842.50 | 2848.00 |
| Bias-down: under | 2822.75 | 2828.50 |
| …would target | 2816.00 | 2821.75 |
| Signal status: STILL TESTING BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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 night’s rally had formed a “new Globex trend extreme” at 2853.00 and gapped up to 2849.75. The balance of the morning ranged choppily sideways down to 2845.00. 
The bias environment lapsed by surging 15 points to attack 2859.00 as noon began.
Finally, some intraday trending. Apparently, trending by the same intraday sponsorship that had failed to uphold Monday morning’s probe above Friday’s highs. The rally was already fading to 2853.00 when a China trade headline triggered a collapse to 2841.50. A bounce to 2852.00 returned to session lows as the bias environment began lapsing.
Sellers had not gained traction through the bias environment exit and final hour’s entry. But the 3:10-3:20 proxy window trended down to fresh session lows, a combination that usually produces dramatic follow-through at some point before the close. In fact, the position-squaring window quickly tested 2829.00. The close bounced back up to 2840.00.
Tuesday’s gap up was filled by the China trade headline’s reaction, after barely touching Monday’s range. It is not “unfinished business.” More significant may be the two consecutive sessions of distribution ahead of Wednesday afternoon’s FOMC events, which suggests a very opportunistic trading environment.
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))
Overnight strength again attacked 1.1450 while overlapping Monday’s highs, allowing the sell signal to be raised to 1.1405 from 1.1380. The timing no longer tolerates delaying a break lower.
Gold Apr Contract (GC, ETF: (GLD))
Gapping up above Monday’s highs pierced last week’s intraday highs, but stopped short of the overnight attack on 1312.00. The restrained optimism is potentially bullish from a contrarian perspective.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s gap up was still contained within Monday’s range and fluctuating narrowly around the 15.40 buy signal. Almost any initial strength on Wednesday would be credible for extending higher intraday.
30-year Treasury Jun Contract (US, ETF: (TLT))
If not still overlapping the 146-00 buy signal into Tuesday’s open, then the few ticks of strength at least lacked momentum. Which the morning exploited by sending price back down to the 145-16 sell signal. But already having delayed the reaction down, only now testing the sell signal should hold as support and avoid triggering through the close. Regardless, back above 146-00 would tolerate no delay in extending higher if valid.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs pierced the 59.50 room for noise above 59.25 that must be recovered through the close to confirm the rally’s momentum remains intact. Having tested 59.50, closing back under 59.25 would not greet Wednesday’s EIA from a position of strength. But a downleg would be signaled back under 58.40.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Surging overnight through the 2.84 buy signal pierced prior highs by 1 penny up to 2.89. A second consecutive higher close would confirm a new upleg is underway.