Posts by Rod David
The First Trade & Pre-open Tour Recording… Eking higher.
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…
Sunday night’s gap up quickly met resistance from 2461.00 at the prior Friday’s range. It’s 2473.25 gap son became support while awaiting Monday’s open, which quickly surged through the prior Friday’s 2477.75 high. And higher to 2487.00 during the noon hour. It was the first stretch of intraday trending since last Tuesday afternoon’s bounce. The balance of the session ranged narrowly sideways down to a 2484.00 sell signal. The afternoon’s 2490.00 bias-up target was left outstanding.
Overnight action’s new info…
Globex opened up at Monday’s high, and eventually attacked 2489.00. Its reaction down to 2485.25 has been recovered to test fresh highs at yesterday’s 2490.00 “unfinished business above.” Despite being only a couple of points above yesterday’s high, there is enough complexity to qualify as a “new Globex trend extreme” requiring intraday retest.
If, then…
The July pivotal high and August’s actual high were met in the same session. The setup’s attraction above is neutralized. That’s not bearish, but it’s one less bullish element. The attraction was neutralized by a session that gapped up, which isn’t bearish near-term, but it does create an attraction below. The underlying problem is that this upleg originates from a distributive pattern, which clearly doesn’t prevent extending higher, but tends to limit it and to end it abruptly. This stage cannot very well tolerate backing-and-filling. Nevertheless, extending higher intraday without closing higher could be the first available signal that yesterday’s rally is already done.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2490.00 would be likely to trigger the 2489.00 bias-up signal at 10:15. Exiting the open under 2485.25 would be unlikely to trigger bias-up.
Phonetic dictation…
Alright good morning and welcome good morning and welcome it is Tuesday it’s time for Tuesday’s morning market tour we have the fall through to yesterday’s rally yesterday you’re having a couple of interesting interesting points to its Aura let’s get this one thing and then we go okay so interesting point number one to yesterday’s rally is that since last Tuesday last Tuesday afternoon last Tuesday afternoon being the reaction up from the post Labor Day reaction down reaction to the missile that was launched over the weekend that’s Tuesday afternoon was the only trending that the market had done for the week other than gapping up trending up that night gapping up Wednesday Wednesday Thursday and Friday at raining sideways and that’s a Distributive pattern by the way and it was very vulnerable to plunging at the at Friday’s open nearly avoided that so it’ll way literally as much selling pressure is could have been expended was expended without reversing down but this is not a stable pics doesn’t mean that I can’t producer rally has to be pretty aggressive if it’s going to there you go Gap up BSA was the first yesterday morning was the first round for stretch of trending since last Tuesday afternoon it was up trending in positive territory of resistance afternoon the same day again if we open under 85 not today but it’s an attraction it’s likely to be tested it’s going to be difficult in other words within this range to justify it short entering unless 89 isn’t recovered unless it doesn’t maintain its recovery through 10:15 in other words to there’s no bias butts in the playoffs setting test of the bias down signal unless some other set up or signal where to trigger the Bears release points down that’s my next that advances brexit so perhaps it’s a reaction to that presumably but it also as you can see comes into this and really tests it’s a fresh High versus the month old high six-week-old High fills this Gap says I have to say it’s barish but now there is some substantial resistance here with some unfinished business below that even in the most bullish scenario would be subjective backing and filling looting it’s tough to extend higher or Trend higher I should say when that serves at spiked up has it really been corrected it’s been corrected to a 38.2% retracement that’s it is it’s been great to do a 38.2 and 68 at the very least let alone lower hasn’t really been able to pick up stranded look up we could look for the rally to be resumed waiting to recover 4050 may only produce a retest of the highs but that’s really what would step in front of extending dad 1815 1320 where we could get our next look at the validity of our strength of the movie while 1790 barely recovered yesterday even more so than gold still being tested still testing at cell signal at the close but failing them the last breaking lower back to attacking is Lowe’s and this is after Friday failed to confirm Thursday’s break out from multi-session range which by the way he has clothes was still within so how look at this before it’s a problem for the uptrend basically 1765 1770 Optimum from the perspective of maintaining resuming the uptrend optimally 1770 would hold if not intraday at least through the clothes even that’s not optimal for maintaining the uptrend without a voiding a deeper dip because it’s a second consecutive lower clothes under the range so the likeliest scenario in an ongoing uptrend is tested whether it’s tied before recovering not just 295 but above 298 would reverse the trend up until then the likeliest scenario even though the brake hasn’t been confirmed wasn’t confirmed by the second consecutive session it was though here today session by step that tends to reflect weekend and buyers the likeliest scenario or at least an interesting risk-reward proposition is that 295 is being tested as resistance before resuming the declined and the 284 so if they basically everywhere 294 now basically calling a nickel risk if no one to take the stop especially on a close but intraday 298 is resistance so let’s just call it a nickel $0.07 whatever that is versus a dime $0.11 it’s still a slightly positive risk-to-reward ratio along with the pattern suggesting that were headed down there to begin with but not just a stop it stop and reverse on a close with 298 stopping over to Long so as well have had their last chance and reversing down at that point .
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2491.50 | 2489.00 |
| …would target | 2497.75 | 2495.50 |
| Bias-down: under | 2483.00 | 2480.75 |
| …would target | 2476.75 | 2474.25 |
| Signal status: BIAS-UP | 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)
Weekend weather wasn’t a game-changer for the ongoing topping pattern. Monday’s surprising relief rally did position the market to for a bigger leg up if reinforcements were to arrive Tuesday. Otherwise, either an immediate pullback is needed to refuel buyers. Extending higher too quickly would find buyers extended and buying pressure expended.
Extending higher would also fulfill Monday afternoon’s “unfinished business above” at its 2490.00 bias-up target. The final hour touched a sell signal at 2484.00 without triggering it. Monday morning was the first actual uptrending since the prior Tuesday afternoon’s reaction up from the morning’s plunge.
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 Sep Contract (EC, ETF: (FXE, UUP))
Gapping down Monday exploited Friday’s “ineffectual optimism” that had gapped up, spent the entire session in positive territory, and probed Thursday’s high without also closing above it. Holding the 1.1970 buy signal would make any initial strength Tuesday likely to retest the high. Closing under 1.1955 would start to signal a deeper pullback underway.
Gold Dec Contract (GC, ETF: (GLD))
Monday’s gap down tested and probed under the 1337.50 sell signal whose previous test had launch fresh highs. A second consecutive lower close Tuesday would make a reversal down credible, but meanwhile a retest of Friday’s 1351.00 close is likelier first.
Silver Dec Contract (SI, ETF: (SLV))
Friday’s failure to confirm Thursday’s breakout left the rally vulnerable to Sunday night’s reaction down that tested the 17.90 sell signal as support. It held, and now has left outstanding a gap back up to Friday’s 18.10 close that will at least want to be filled.
30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s premature bounce to fresh highs out of Wednesday’s brief pullback had not extended higher Friday. Monday’s gap down to Thursday’s open picked up the baton and extended relentlessly to fulfill its objective under 156-00. It can extend down to 155-16 to compensate for the delay. A corrective bounce meanwhile could fill the gap back up to Friday’s 157-10 close.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Just a little more room under Friday’s low was possible while maintaining Friday’s dip to 48.00 and 47.25 as only temporary. Touching 47.00 triggered a bounce back up to 48.00, whose recovery would signal that last week’s confirmed breakout’s eventual third higher close was in-play.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Gapping up Monday and trending higher intraday tested the 2.95 sell signal that had triggered Friday. Which held, creating an “inside day,” and leaving open the 2.84 objective, now further fueled by filling the gap back down to Friday’s 2.89 close below.
Mid-day Update… Straightened up.
Shallow morning pullback recovers to resume the rally.
The corrective dip from 2482.00 was shallower than it was brief. Its potential to 2477.50 was barely attacked to within 5 ticks. A narrow range there finally resolved up as the bias environment began lapsing.
Extending higher through the noon hour touched 2487.00. This afternoon’s 2484.75 bias-up signal triggered, putting into play its 2490.00 bias-up target. There has yet to be a fresh high.
Let’s clarify what today’s test of July’s “pivotal high” means, and what it doesn’t mean. As with any pivotal high test, the actual high is now all but assured to be tested, too. That’s 2486.00 basis Dec and 2488.00 basis Sep, and both have been pierced by 3 ticks. It’s also almost 2491.00 basis S&P Cash (SPX) which is still 1 point away.
I first addressed the pivotal high’s attack on the last rally leg. Testing it and entrenching the uptrend then would have made the next upleg likely to probe significantly higher. Last Tuesday’s drop created a new downleg. Its distribution has changed the reliability of a new high having substantial consequences. It’s not ruled out, but it’s not as likely.
Meanwhile,remember that today’s upleg is NOT a session-long rally. Regardless of how it has behaved so far, or how it might still behave, its setup wasn’t optimal. Afternoon stagnation or even reversal down is still possible.