Posts by Rod David
The First Trade & Pre-open Tour Recording… In like a lion, indeed.
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…
Thursday’s market was range bound without any of the week’s earlier volatility catalysts. Range bound, but still choppy, resisted by 2793.00-2794.00. An overnight swing down to 2781.75 was nevertheless contained within Wednesday’s range, which contained Thursday morning’s swing down to 2783.50. The afternoon’s swing was even narrower, although the last 3:37-3:52 Position-squaring window collapsed momentarily to pierce the morning’s lows at 2782.75. Gapping down and ranging exclusively in negative territory suggests that weak hands are bearish, meaning strong hands are bulls. Not quite a buy signal, but reinforcing an immediately bullish move Friday. The narrowing extended range has limited predictive value otherwise.
Overnight action’s new info…
Immediately bullish moves don’t get much more immediate than this. Thursday’s late dip had bounced 6 points through the close to prove its weak-handed sponsorship. Globex immediately dipped back down to attack the late intraday low to within 1 tick, but no lower, and immediately began recovering. Thursday’s highs were soon probed up to 2795.50, and then to 2798.50, hovering there through midnight. Another push higher to 2802.50 just after Europe’s opens immediately began hovering there, too.
If, then… (notes to accompany the Tour recording)
March is coming in like a lion, and that’s not just a favorable comparison to yesterday’s inside day. The post-close Market Tour pointed out that with Thursday’s narrowing range behind, and weekend illiquidity ahead, credible trending would have to appear sooner rather than later Friday. Based on the overnight levels of influential resistance, the pattern’s next higher objective would neutralize the outstanding gap back up to Monday’s 2808.00 open. One challenge in this setup will be in attracting post-open reinforcements, which is hardly assured after having trended relentlessly overnight. That resolution will then be influenced by Friday Factors, which help the open’s bias to persist through the noon hour. Bias-up seems very likely to trigger, but not necessarily bias-up renewed.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2796.00 would be unlikely to exceed the 2798.00 bias-up target at 10:15 or to renew the bias-up signal. Exiting the open at 9:45 above 2800.50 would be likely to exceed 2798.00 at 10:15 and renew the bias-up signal.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2790.50 | 2790.75 |
| …would target | 2797.75 | 2798.00 |
| Bias-down: under | 2780.00 | 2780.50 |
| …would target | 2774.00 | 2774.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| 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)
The week’s earlier volatility catalysts had largely subsided before Thursday’s open. Left to its own devices, intraday price action proved uninterested in resolving to either direction. Two considerable trending attempts overnight had remained within Wednesday’s range. Morning choppiness was restrained by a shrinking range. And the afternoon range was narrower still.
Price action from a narrowing extended range has limited predictive value. But gapping down and ranging exclusively in negative territory suggests that weak hands are bearish, which would mean strong hands are bulls. This factor isn’t predictive, but would reinforce an immediately bullish move Friday.
With the narrowing range behind, and weekend illiquidity ahead, credible trending would appear sooner rather than later Friday. Appear early, and quickly extend beyond a prior relevant level, or else Friday’s biggest risk would be remaining within the relatively narrow range.
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))
Not at all prohibited from resuming the rally, Thursday’s open was greeted by strength to a fresh highs. But it disappeared quickly as the balance of the session hovered in negative territory. Any initial strength Friday would be credible for extending higher into the weekend.
Gold Apr Contract (GC, ETF: (GLD))
Pulling back to “lower prior highs” proved insufficient to launch a recovery, as Thursday dipped even deeper to 1314.50. The 1327.50 buy signal remains unchanged, although its test becomes likelier.
Silver May Contract (SI, ETF: (SLV))
Fresh lows Thursday don’t enable lowering the buy signal, but the pattern should include a bounce back up to 15.80 regardless of whether its resistance will hold.
30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday’s reversal wasn’t rejected overnight as Thursday slid through 145-16 to test the 145-00 last relative low. The intraday lower low doesn’t yet qualify as a minimum probe of the prior low, and a buy signal is unlikely to develop soon in this pattern.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-lower ranging Thursday didn’t exploit Wednesday’s hesitation at the gap-fill, further suggesting the pattern would resolve up.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of strength enabled recovering after the gap up had reacted down. But the rally has yet improved.
Mid-day Update… Still no trending.
Sloppy and choppy prevail.
The overnight range was contained entirely within yesterday’s range. And now this morning and noon hour have been contained within the overnight range. Price action is getting less volatile, not more so.
Neither of this afternoon’s bias signals was touched — not even attacked — and now this is a no-bias environment. Trending attempted at 2:30 as the bias environment begins lapsing would be credible for extending int the close.
Otherwise without an artificial catalyst, the pattern indicates no sponsorship. It has no requirement to resolve in either direction, or to resolve today at all.