Posts by Rod David
Post-open Review… BIAS-UP INVALIDATED.
Pullback through the open still recovers bias-up signal, then doesn’t.
Yesterday’s last-minute surge through 2947.00 into the post-close fresh high had extended to new highs at 2961.25 before midnight. The trend since then has been down. Down into Europe’s opens, down into the open and then down through the first half-hour to touch 2947.00.
Still, the 2950.50 bias-up signal was recovered in time to trigger cleanly. Its subsequent test as support did NOT hold at 10:30, invalidating the bias-up. The 2955.75 bias-up target is NOT in-play, although the overnight high’s “new Globex trend extreme” might also be an attraction.
The invalidation isn’t surprising since upside objectives are fighting the headwinds of this afternoon’s impending FOMC events. Triggering bias-up first, and THEN being invalidated does reflect excessive optimism. Regardless, back above 2953.25 would be helpful to the upside. Otherwise, a deeper pullback to 2945.00 is likely.
The First Trade & Pre-open Tour Recording… They’re baaack (up).
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…
The recovery from an overnight dip was already retracing into Tuesday’s 2941.50 open. The retracement extended to test overnight lows down to 2935.00, collapsing from there to 2926.00. Simultaneously oversold RSIs helped to launch a reaction that entered the noon hour back above the earlier 2935.00 low. Still firming into the afternoon bias environment didn’t firm enough in time to trigger the 2941.50 bias-up signal. That didn’t prevent no-bias trending from probing above it anyway, or from hovering at the afternoon’s 2947.00 bias-up target. Anxiousness ahead of AAPL’s post-close earnings probably paralyzed price action there. A blip-up at the close touched 2950.50.
Overnight action’s new info…
Surging to 2956.50 in reaction to AAPL’s earnings reaction (AMD did well, too) neutralized Monday afternoon’s unfinished business at 2954.25. Consolidating into early Globex was recovered to extend the rally to 2961.25 before midnight. Complexity of the upleg qualifies its high as a “new Globex trend extreme” requiring intraday retest, often the same day. Price action since then drifted lower several points, eventually steepening to test this morning’s 2955.75 bias-up target by 3 ticks, and the upper-end of yesterday’s post-close surge.
If, then… (notes to accompany the Tour recording)
All price action above Friday’s 2951.50 high has developed after yesterday’s close. It’s impressive enough that the next session’s 2926.00 low was recovered intraday at least to within proximity of the high. But already trending above it and by so much suggests pessimism is in hiding, but that a few pessimists have been found and shot. This can prove bearish from a contrarian perspective, although not too pleasant for pessimists in the interim, in more ways than one. But it is exclusively an overnight rally, essentially, which can become an intraday decline if the open doesn’t quickly attract intraday reinforcements. That’s without even considering the weighty afternoon events, or any negative pre-open earnings surprises. Trending beyond an established range is already difficult ahead of an afternoon’s FOMC events, or difficult to maintain. Extending last night’s rally this morning anyway would next target 2969.00, and be difficult to defend. Backing-and-filling ahead of the report could become a much deeper reversal if the 2950.50 bias-up signal doesn’t trigger.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2957.25 would be likely to exceed the 2955.75 bias-up signal at 10:15 to renew the bias-up signal. Exiting the open above 2953.75 would be likely at least to trigger the 2950.50 bias-up signal. Exiting the open under 2947.25 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2948.50 | 2950.50 |
| …would target | 2953.75 | 2955.75 |
| Bias-down: under | 2937.75 | 2940.00 |
| …would target | 2932.25 | 2934.50 |
| Signal status: BIAS-UP INVALIDATED | . | |
| 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)
Monday afternoon had hesitated to extend above 2951.50 ahead of post-close GOOGL earnings. That became a late dip that extended down through the close to 2942.00 and then to 2936.00 overnight.
All of which could have been reversed had the overnight bounce to 2945.50 been maintained. But its reaction greeted the open too low and the overnight low’s retest eventually resolved down sharply to 2926.00.
Monday’s “unfinished business” above at 2954.25 would seem to be in another universe at that point. Unfinished business was created below on oversold RSIs at the morning’s 2926.00 low. None of which prevented the morning’s bias environment exit from surging back into the 2935.00-2940.00 post-open range. Or from probing above the afternoon’s 2941.50 bias-up signal, despite already triggering no-bias.
AAPL’s post-close earnings is probably responsible for hovering at the afternoon’s 2947.00 bias-up target — despite not triggering bias-up, and being no-bias trending. And now a last-minute surge to 2950.50 has extended sharply higher to 2956.50 in reaction to AAPL’s favorable earnings reaction. AMD did well, too.
Unfinished business above is neutralized. Extending the rally Wednesday morning will be difficult ahead of the afternoon’s FOMC events. Potential to back-and-fill is likelier than actually reversing the trend down. Extending higher would next target 2969.00.
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))
Calculable resistance and the previous downtrending support (now resistance) of the massive Falling Wedge coincided at 1.1235. Both were probed Tuesday morning, as 1.1280 “higher prior lows” were attacked up to 1.1275. Closing above 1.1235 would create a position of strength to enable backing-and-filling to help form a bottom, so long as the lows are not retested.
Gold Jun Contract (GC, ETF: (GLD))
Overnight strength continued the pattern — or, lack thereof — for stringing together two consecutive similar sessions that would signal trending. Gapping up was retraced immediately to fill the gap back down to Monday’s close, which held as price fluctuated sideways in positive territory. A second consecutive higher close is still needed to signal Monday’s break did not gain traction.
Silver Jul Contract (SI, ETF: (SLV))
Despite bouncing overnight from Monday’s drop, Tuesday’s choppy open dipped to 14.85. And despite the dip, positive territory was recovered up to 15.00. All of which helps to suggest Monday’s drop won’t extend, but a higher close is still needed.
30-year Treasury Jun Contract (US, ETF: (TLT))
Closing under 147-04 and testing 146-30 Monday extended down only to 146-24 before bouncing up to 147-18. Wednesday’s FOMC isn’t being greeted from a position of strength or weakness.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already testing the 64.35 buy signal before Tuesday’s open was suspicious, and its resistance did launch a reaction down that filled the gap back to Monday’s close down to 63.30. The buy signal is free to trigger cleanly, but post-close API and Wednesday morning’s EIA are not being greeted from a position of strength.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Monday’s intraday recovery firmed a little further overnight to pierce Friday’s 2.60 high by a penny, but Tuesday’s open slid to test 2.57. No buy signal is being confirmed, but the restrained optimism is potentially bullish from a contrarian perspective.