Posts by Rod David
Post-open Review… Bias-up bias.
Pre-open rally, post-open surge, bias-up trigger.
The overnight rally to 2349.50 retraced 61.8% of yesterday afternoon’s drop. Its reaction back to unchanged at 2341.00 could have extended into a gap down, but did not. Instead, another bounce greeted the open at 2346.00, retracing 61.8% of the overnight drop.
This retracement extended higher. Fresh highs touched 2350.50, and started ranging sideways. And is still ranging sideways. Choppily. The 2346.75 bias-up signal was touched as support, AFTER it had already triggered. A fresh high printed momentarily, but hasn’t extended higher.
Now having printed above the pre-10:15 high, invalidating the 2352.25 bias-up target must exit the bias environment under the 2335.00 bias-down signal. Difficult, and unlikely. So, not meeting the target this morning would make it “unfinished business above.”
Meeting the target early enough would allow time to reverse back down. Friday Factors could protect against that if not already reversing down by noon — protect against reversing down, if not also enable a short-squeeze higher.
Regardless, gapping up under yesterday afternoon’s high means that sellers will not be marginalized today. A downdraft could develop at any time.
The First Trade & Pre-open Tour Recording… Not climbing out of it.
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…
Thursday morning’s recovery from 2339.75 up to 2356.00 included no-bias trending. Only required to retrace 2350.50, dropping into the close was testing 2339.75. Overbought RSIs were left outstanding at the high’s errant tick.
Overnight action’s new info…
Initially rallying to 2349.50 retraced 61.8% of the drop from Thuirsday morning’s highs. Trending down since then has eventually reached 2341.00, essentially unchanged from yesterday’s close, and attacking yesterday’s 2339.75 lows.
If, then…
8-9 points up and then 8-9 points back down. Gapping up this morning just 3 points above the overnight high could have reversed the decline. A lot of buying pressure was expended to try getting there, and none of the ground that was recovered has been maintained. Now the open is probably too close for another bounce to offer that potential. But there’s just enough time to greet the open gapping down. Regardless, the failed Ascending Triangle that I described yesterday already suggests resolving sharply lower to 2331.00 or 2327.00, if not also to 2317.00. Only triggering bias-up would suggest otherwise.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2348.75 would be likely to trigger the 2346.75 bias-up signal at 10:15. Exiting the open under 2343.75 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2350.25 | 2346.75 |
| …would target | 2355.50 | 2352.25 |
| Bias-down: under | 2338.25 | 2335.00 |
| …would target | 2332.75 | 2329.25 |
| 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)
Thursday morning’s probe above its bias-up signal was no-bias trending, doomed to failure. That was already retraced back to its 2350.50 bias-up signal, and also 5-6 points lower where the 10:15 no-bias signal had triggered. But “unfinished business” was left outstanding at the overbought RSIs of its 2356.00 high. It’s only an errant tick, but it requires an eventual retest.
Unfinished business below remains outstanding at Wednesday morning’s 2331.00 bias-down target. It may be met without much delay, since Thursday afternoon’s sellers gained traction by exiting the bias environment under the noon hour’s low, and the proxy window trended down to fresh session lows.
A “failed ascending triangle” is forming, which I review graphically during the Market Wrap video. The pattern tends to resolve sharply lower. And that sharply lower resolution tends to form a more durable low. The 2331.00 attraction could be probed to 2327.00, or to 2317.00.
Meanwhile, Thursday afternoon’s 2352.00 high formed too late for gapping above it Friday to form a “session-long rally.” However, gapping up above 2352.00 would invalidate the traction that Thursday afternoon’s sellers gained. And while not a session-long rally, it would still be credible for extending higher — perhaps not relentlessly, but marginalizing sellers into the weekend.
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 Jun Contract (EC, ETF: (FXE, UUP))
Dipping Thursday under the prior two sessions avoided touching “lower prior highs.” But the potential Island pattern is not an optimal formation. Almost any strength would be likely to extend up to 1.0900.
Gold Apr Contract (GC, ETF: (GLD))
Initially probing a fresh high above 1253.00 at Thursday’s open soon had reversed down under Wednesday’s range to test 1243.00 as support. The week’s previously confirmed breakout still requires at least one more eventual higher close.
Silver May Contract (SI, ETF: (SLV))
Thursday’s opening surge held 17.70 before reversing back down to unchanged at 17.57, briefly probing a nickel deeper. Closing flat-to-higher keeps alive potential to 17.90.
30-year Treasury Jun Contract (US, ETF: (TLT))
Flat-to-lower ranging Thursday tested the 150-04 pullback limit, which held like the last two pullback limit tests. Those prior tests also launched uplegs to the next higher objective, which is 152-00 so long as 150-04 holds as support.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s relatively narrow ranging fluctuated around the 47.75 lower-end of last week’s Island. The restrained optimism maintains the potential for forming a substantial bottom. But it will need to begin recovering Friday, or else trending down into the weekend could more likely resume the decline.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
The knee-jerk reaction to Thursday’s EIA report momentarily touched the 2.99 sell signal and snapped back up into the range. The news wasn’t greeted from a position of strength or of weakness, but the next break either way is now likely to extend in that direction.