Posts by Rod David
Post-open Review… Anchors away.
Gap up retraced.
Unchanged is natural support. Yesterday’s unchanged is its 2471.00 cash session close. And a 4-1/2 point slide probed it by 1 point in time to snatch a clean bias-up signal above 2472.50. The slide developed in time to invoke the grace period, now putting into play an offsetting test of the 2463.50 bias-down signal.
Presumably, the drop was triggered by news of the Russia investigation/witch hunt expanding to President Trump’s business dealings. Extrapolating from an interview released last night in which Trump said this would be going too far, Special Counsel Mueller would be fired shortly. The market is obviously concerned with the extra depths of uncertainty that would/will bring.
Immediate fallout has extended down to 2465.50. That’s essentially yesterday morning’s “lower prior highs.” Its test is reacting up 7 points while still being the first reaction up from the previous trend’s extreme. Oversold RSIs require an eventual retest, which this morning would likely reach 2463.50. 
Otherwise, recovering 2469.75-2470.25 would start to signal the news was absorbed already — that’s being probed now by more than 2 points, and wasn’t yet touched when I began writing this sentence.
As for the gap up, it did not extend higher, so it is not an anchor that preserves the uptrend. It was maintained through the open, so its 2474.00 opening print does require an eventual intraday retest, however that may resolve. And the 2476.25 overnight high is a “new Globex trend extreme” that requires eventual retest intraday, too.
The First Trade & Pre-open Tour Recording… Hold that probe.
Proper context can start the day with a solid win and make all the difference.
NEW 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…
Wednesday gapped up above Friday’s 2461.00 prior highs and trended up throughout the day to touch 2471.00. The biggest drawdown followed the open’s surge to 2466.00, which was retraced to attack its 2462.00 maximum pullback limit. Since Tuesday’s dip had recovered, Wednesday’s close qualifies as a breakout from a multi-session range. WedEX triggered actively bullish, subject to Thursday’s open gapping down back under prior highs.
Overnight action’s new info…
That’s different. Ranging narrowly last night broke higher at Europe’s opens, surging to new highs at 2474.00. Playing catch-up to yesterday’s gains is fostering optimism. Friday’s surge to new highs was treated skeptically, not only Sunday night but also Monday. The behavior isn’t so overly-optimistic as to be bearish from a contrarian perspective, but it does set a pace that probably won’t cope well with not being maintained. Meanwhile, the overnight probe has consolidated back down to the Globex open’s high, centered around this morning’s 2472.50 bias-up signal.
If, then…
A second consecutive higher close Thursday would confirm Wednesday’s breakout and then require at least one more higher close. We’ll see. The ongoing template suggests fresh highs will be short-lived, and probing higher overnight or this morning doesn’t ensure maintaining positive territory this afternoon. But confirmation of a higher close Thursday would buy the rally a lot of time. Gapping up above yesterday’s highs could form an anchor that also buys the rally a lot of time — so long as the anchor fully forms by extending higher through the open. Not extending a gap up, or not even gapping up despite already probing fresh highs overnight, would undermine an attempt to extend the rally today.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2474.25 would be likely to trigger the 2472.50 bias-up signal at 10:15. Exiting the open under 2470.75 would be unlikely to trigger bias-up.
Phonetic dictation…
okay good morning and welcome it is Thursday it’s time for Thursday’s morning market tour we have new highs and if you heard new highs and not an unusual way gapping up trending up extending higher had Tuesday Tuesday afternoon head Tuesday’s closed dipped instead of firming or ranging sideways or not dipping been gabbing up above prioritize would have triggered a session Long Valley set up and a session long rally looks like this in a lot of cases often with one time and window that I’ll dip under the prior timing Windows High but such a long rallies timing window but one probes the prior timing Windows high as indicated at the open to expect that we didn’t know to expect that necessarily at the open by the session long Rally Set up because Tuesday as this is necessary for the setup is to be rejection the Gap up has to be rejecting this was just extending if it were a sessional rally we know that this morning was likely to probe your eyes extend yesterday’s rally in other words whether or not it was sustained biased upward or downward based on what actions they took the Wednesday’s clothes and Wednesdays clothes being real or to the degree that it was influential Wednesday’s close relative to Prior price action now this is not multi-session trending single breakout can’t be both can’t break out in multi-session Ranger If This Were multi-session ranging we’d have a very reliable in this whole setup with other bells and whistles considered we have a very reliable wed x bullish wed x actively bullish wed x we do have an actively bullish way that’s because it’s a breakout of Breakout by its nature tends to be with very few exceptions a actively bullish wed x it can be it can be invalidated at the open it doesn’t look like it’s going to be but when it’s just a single session there’s still a break out there’s still I’m sorry I’m trending there is still an opportunity to invalidated by gapping Down Under the entirety of Wednesday’s range and preferably back under Pryor High as that Wednesday’s breakout had recovered I Donuts certainly not in the works here but if Thursday is open where to print Under prioritize then we’d have a invalidated actively bullet X and that in itself would be Friday morning on Friday afternoon and Monday morning what’s today’s show your hand Mario draghi coming out so long as that is retraced reacted up this should be alone right here otherwise we are headed lower the get the high won’t be retested if today’s open compensates for the delay in extending down the Looney we talked about yesterday as potentially forming a setup having no unfinished business above and yet having a new High clothes new trend High clothes closing under Tuesday’s low Tuesday 7895 Lowe would reverse the trend down would reverse sorry momentum down at this point second consecutive lower clothes would confirm that the trend in Traverse Town but big rally here and no unfinished business above not the cell signal not unless it’s not extended pretty immediately and then the year of course going to be most sensitive to the ECB statement coming out shortly 11510 11525 support being tested looks like headlines Crossing to this area is a cell signal if it’s break is maintained it is meanwhile you know the reason why I had cell signals because it’s support and such a stance will support that’s a long as it is if it’s broken bounce .
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2475.00 | 2472.50 |
| …would target | 2481.25 | 2478.75 |
| Bias-down: under | 2466.00 | 2463.50 |
| …would target | 2459.50 | 2457.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP SIGNAL | 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)
Wednesday behaved like a session-long rally, trending up through every timing window. But the pattern going into the session didn’t allow for that setup. Why would that matter? A session-long rally would be likely to extend the next morning. Thursday might extend anyway, but isn’t required.
The pattern is also behaving like the resolution to an extended narrowing range. That’s when a false break in one direction reverses more substantially in the opposite direction. This is not that, either, since the range off Friday’s high had not narrowed. Why would that matter? Because the more substantial leg’s duration can be timed against the false break. This one would end Thursday in decline.
A setup that is in effect, actually is no longer in effect — Friday’s requirement for a new trend extreme close is now fulfilled. There is no “unfinished business above.” We’ll see how long that lasts. Wednesday was a breakout from a multi-session range, so a second consecutive higher close Thursday would confirm and require yet another higher close. Or more.
Meanwhile, the ongoing template suggests fresh highs will be short-lived. Closing higher Thursday anyway would go a long way to suggesting this breakout could go a long way. Not confirming Wednesday’s breakout Thursday could open the door to reversing down a long way instead.
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 Wednesday leaves unfinished business above at Tuesday’s close, in addition to the open’s gap up above all prior highs.
Gold Aug Contract (GC, ETF: (GLD))
An overnight mini flash crash was recovered into Wednesday’s open to retest the 1244.00 target that had held its test Tuesday. It held its test Wednesday, too, and back under 1236.00 would now signal the trend reversing back down.
Silver Sep Contract (SI, ETF: (SLV))
Overcoming an overnight dip into Wednesday’s open only retested Tuesday’s highs in the 16.32-16.34 range. Now closing back under 16.02 would signal the trend reversing back down.
30-year Treasury Sep Contract (US, ETF: (TLT))
The recovery wasn’t quick to resume Wednesday, but didn’t have to, as the durable bottom has already formed. Any reaction down — even an intraday probe of prior lows — would be likely to recover and to resume the rally.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s post-close bobble in reaction to API was invisible at Wednesday’s open. Wednesday’s reaction to API was more obvious, surging back to the range’s 47.00 upper-end. Now closing back under 46.00 would signal momentum reversing down, which would be confirmed under 44.90.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Shallow higher highs Wednesday morning tried to outrun the attraction back to 3.01 that could inhibit the recovery.