Posts by Rod David
The First Trade & Pre-open Tour Recording… Taking care of (yesterday’s) business.
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 night’s rally had recovered to 2569.25. Greeting Tuesday’s open back up at 2567.75 immediately reacted down, filling the gap from Monday’s 2563.50 close. Holding a test of the bias-up signal had put into play an offsetting test of its 2560.25 bias-down signal. But the gap’s natural support launched a bigger bounce extending to 2570.25 through the afternoon bias environment exit. Its reaction down was likely to probe fresh session lows, but two unfavorable headlines hijacked the organic sponsorship. That limited the drop to 2564.25, leaving 2560.25 to become “unfinished business below.”
Overnight action’s new info…
Flat-to-lower ranging through yesterday’s close immediately started resolving down. Two separate probes of lower lows eventually came within 1 tick of 2560.25, neutralizing its attraction. All of which has been recovered back up to overnight highs attacking 2566.00.
If, then…
One of two templates are likely this morning. One compensates for the delay in fulfilling 2560.25, and the other template isolates the delayed test to the overnight. Compensating for the delay would extend down to 2556.00-2557.50. There’s still room down to 2554.00 before even threatening a deeper pullback while waiting for a new trend high close. Instead, the overnight action can be isolated back above yesterday’s 2563.50-2564.25 lows. Maintaining their recovery through the open would be a good start, but quickly recovering above yesterday’s 2567.25 close would offer better protection against resuming the decline.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2566.00 would be unlikely to trigger the 2563.00 bias-down signal at 10:15. Exiting the open under 2560.25 would be likely to trigger bias-down.
Phonetic dictation…
good morning and welcome it’s Wednesday it’s time for Wednesdays and Morning Market to her Funny Thing Happened on the Way to fulfilling downside objectives yesterday a couple of headlines back to back it would go we had a balance of the way up to 25 7025 which was the room for noise precisely the room for noise above 6825 6750 6750 68.85 being the inflection point for the morning that ultimately whole day I ended up holding onto price not letting it go to a bias environment exit actually the thing and had tried extending was productive did something relevant probing a fresh high pressure above the timing Windows High when they was leaving what the preliminary price action had done and it started cluing us into the reversal coming and it developed pretty quickly on a couple of headlines even stop prematurely of its bounce potential before triggering another couple of them actually but the point is Scott Cellars ahead of themselves the well based on the same thing the two headlines this stopping pessimistically short I know it’s just a tick but it’s still a relevant level that wasn’t touched before extending down and you can see why the headlines clearly had an impact the first one having a little bit and then the following it was an actual move under there was a pattern set up that suggested under 6625 would be an air pocket when and said that air pocket developed up here thanks to the headline the artificial cause not the organic organic cause and delayed the inevitable didn’t have to delay it actually could have turned going to respond come back up to the house before the inevitable but instead is it is the inevitable was produced overnight and that is extending first of all the afternoons decline or resuming at I should say and then extending it down to 1650 25 650 coming within a tick of the unfinished business below unfinished business below anyway but not for the purpose of neutralizing two things happen to this price action like clear templates others but the overwhelmingly likelihood is that today is going to do one of two things either resume that even though it was already tested overnight 2565 not for the purpose of testing for the delay and compensating for the delay means extending even deeper 220-557-5056 so if the decline is rallying this morning or holding a moment then we’re headed back to the house and threw them to 2557at least isolate the overnightstay open that the open is back above yesterday’s Lowe’s 6350 6425 get out of the open above 6350 6425 hold them through the open and very likely all that overnight stuff will have been isolated it won’t even appear on the intraday doesn’t mean it didn’t happen and everybody’s not aware of it it just points out the sentiment shift had dramatic it is how substantial it is that it didn’t repeat through the open and it was rejected to that degree now I like to see a little more than that not just opening above yesterday 6350 6425 Lowe’s but also above 6767 25-year 6750 essential oil Futures close to 6725 so that would be helpful as well we won’t be out of the woods until 6750 recovered but just get out of the oven in 15 minutes at 6625 66 and will give every benefit of the doubt to the isolation template kicking in to the downside further downside being off the table to the next move being a recovery backup to Mondays if that’s Sunday night size remember there’s an outstanding for today for this morning so highly reliable set up working here at work here but we do have one that’s developing now with this deeper pull back yesterday but it’s a little premature to go there just yet so nothing new on the RC it depends on actually rejecting the overnight drop for one thing but the overnight drop has neutralized and attraction below at the dash on covering it is a big deal would be a big deal extended down over night or afternoon still staying away from a test retest Monday night but there’s a pretty substantial up to 3275 almost two weeks old but makes the eventual less likely to hold still no the euro to put in perspective with the pound is doing the Euro neutralize the Gap yesterday Friday’s close creating a which had developed from barely touching bouncing from one 1760 which I don’t know if I mentioned it needs to be broken if I set up that we discussed coming in would havewould have probed Monday’s loads yesterday and recovered back about Mondays I basically an outside day for me and it did half of that and almost the rest of it by probing under yesterday’s Lowe’s and then recoverbest I probably got two Mondays was and then we’re coming back up to Monday side but did not close above it what do we know about setups that fully form but for the last element they can be as bullish or bearish whichever the opposite it is of what they were going to be this would have been pretty bullish and static could be pretty barish overnight is already Pro blower same setup really applies and that is to recover the prior sessions High which is still similar back to 8825 and higher but that’s not a bicycle otherwise not looking for a bottom to just develop silver did not get back out of of 17 to form a bottom it’s probing lower overnight I will be able to lower the Buy Signal back to 1711 because of the fresh low it was just couldn’t do that and then gold is similarly not holding it close within its range which is support basically but really from a timing perspective for the purpose of bottoming to still be backing and filling when that’s already done it’s getting a little bit bordering on Overkill and getting dangerously close to the pivotal after returning to the retesting the actual low and this pattern so the Bullet scenario that are coming out today very influential made it back down to 118 yesterday held their didn’t reject it wasn’t able to lower the signal and now that’s extending down overnight to 150 as low as 150 probing the employment situation report low and if that doesn’t hold on then there’s a much bigger problem than trying to bottom crude oil just has no reason why it needs to continue its at least neutralizing some attraction below that can otherwise be back to the recovery but last night it was a little deeper it was double what it is now we’re still in yesterday’s range for the really come out yesterday not that 53 has to be tested already today there’s more of a topping pattern that will start to expect and natural gas hovering at the again yesterday it’s break targeting 284 being tested overnightand then we go alright any questions ghost of the charger but I’ll see you there before the open we’re all supposed to have anything else dramatic happened something that suggests the overnight is actually being isolated we can get that I get a heads up on that before the open or not being isolated but remember to isolate the other night we really want to see 2566 recovered and 25 6750 not long after that if not already being recovered as well and anything shallower keeps the door open to probing the other night live good luck today
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Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2573.25 | 2571.00 |
| …would target | 2578.00 | 2576.00 |
| Bias-down: under | 2565.00 | 2563.00 |
| …would target | 2559.75 | 2557.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | FAQ | |
| 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)
The gap from Monday’s 2563.50 close is natural support. It was substantial support Tuesday when tested morning by the post-open plunge from 2569.25. Its support protected against extending down to fulfill a test of 2560.25 that had been put into play.
Recovering to 2570.25 didn’t protect against another downdraft, and had started becoming likely. But being triggered by headlines upset the natural timing that would have produced fresh post-open lows. So, 2560.25 becomes “unfinished business below.”
The delay in fulfilling 2560.25 allows more room to test it, such as down to 2556.00-2557.50. There’s still room down to 2554.00 before threatening a deeper detour prior to fulfilling a new trend high close. No further detour is required, and fresh highs could still come first.
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 Dec Contract (EC, ETF: (FXE, UUP))
Monday’s late dip barely touched 1.1760 before bouncing yet again. The gap back up to Friday’s close was barely touched Tuesday morning, neutralizing its attraction above, and clearing the way even further for a break lower. ECB policy statement and Draghi’s press conference is two days away.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down Tuesday ranged mostly within and around the original 1277.50-1280.50 pullback target that has already held a couple of tests. Closing above 1280.50 keeps alive the bottoming potential and above 1284.50 would suggest momentum reversing up. Closing above 1288.00 would signal a new upleg underway.
Silver Dec Contract (SI, ETF: (SLV))
Silver’s slight gap down to 17.00 probed under it Tuesday morning, holding within Monday’s range, and needing to hold 17.00 to maintain the bottoming pattern. Closing back above 17.11 would help to confirm, and above 17.30 would launch a new upleg.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping down Tuesday opened at the 151-18 pullback objective which the two-week old recovery had avoided. Now closing back above 152-20 would launch a new upleg, likely fill the gap back up to last Thursday’s 153-14 close. Closing under 151-18 would make the recovery path difficult.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
An overnight dip was recovered into Tuesday’s open and extended back to recent highs intraday. There is still no bullish excuse to further delay the minimum 53.00 attraction above, whether only to neutralize it or to probe above it. API and EIA reports are being greeted from a position of strength.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Tuesday’s narrow ranging continued to hold the 2.96 support whose break would allow a more durable bottom to form back down to 2.84.
Mid-day Update… Freeze!
Gap fill holding, and holding, and holding.
Greeting the open at this morning’s 2568.25 bias-up signal’s resistance seemed suspicious. Its quick reaction down fit better, putting into play fresh lows. Only the gap back down to yesterday’s 2563.50 close was tested.
Reacting to a gap is not unusual. But the reaction’s reaction has gone into hibernation. Its return to the 2567.75 opening print didn’t reverse back down, and neither did it accelerate higher. Instead of inflecting there, a 2-point 2-hour range has developed.
Which changes the pattern, a little. Mostly just its behavior. The narrow range’s room for noise is defined by 2566.25-2570.25. Breaking either would still be likely to extend in that direction. But breaking lower would likely find an air pocket down to fresh lows. Breaking higher would at least be vulnerable to accelerating.
Resolving up won’t invalidate the “unfinished business below” now outstanding at 2560.25. But resolving up would enable fulfilling unfinished business above with a new trend high close.