Posts by Rod David
The First Trade & Pre-open Tour Recording… Don’t miss this one.
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…
Tuesday’s close and Wednesday’s open each were within ticks of 2780.00, separated by a relatively narrow overnight range. The range was maintained through the noon hour while price fluctuated between either end. The afternoon’s reaction to FOMC Minutes — the most volatile I’ve seen in years — probed each extreme momentarily to 2791.25 and 2773.75. Still the 2786.00-2787.00 close held within the range at its upper-end. The session left no “unfinished business” and contained no predictive value.
Overnight action’s new info…
Yesterday’s final hour had ranged relatively narrowly, which persisted during Globex’s first several hours. Favorable trade talk headlines triggered a 13-point surge up to 2798.00, interrupted by a Running Correction. Narrow hovering at the high plateaued until breaking lower just after midnight, retracing the Running Correction’s lower quadrant at 2792.25. The surge’s first leg was eventually retraced by 61.8% back down to yesterday’s “lower prior highs” at 2787.00. Three hours ranging narrowly suddenly collapsed down to 2783.50 while I was warning of exactly that during the Market Tour recording. The overnight rally’s Running Correction was complex, creating a “new Globex trend extreme.”
If, then… (notes to accompany the Tour recording)
Tuesday had not decisively confirmed Friday’s close above 2751.00-2757.00. Wednesday didn’t reject it, either, and held Tuesday’s range. Rallying to 2798.00 would seem to settle the matter, and decisively, if developed intraday. But the overnight surge’s retracement back into yesterday’s range is threatening to isolate the 2798.00 test to the overnight, forming a bearish Isolation setup. That would reject the upside, because this instance has an added degree of difficulty from the overnight high’s “new Globex trend extreme.” It requires intraday retest, often the same day, so overcoming its upside attraction would reflect even greater rejection. Look out below if the rejection triggers a Globex-flip, as well, which I describe in detail during the Market Tour recording. Having said all that, trying but failing to trigger an Isolation or Globex-flip setup can be as bullish as it would have been bearish.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2792.75 would be likely to trigger the 2790.00 bias-up signal at 10:15. Exiting the open under 2784.50 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2790.00 | 2790.00 |
| …would target | 2796.75 | 2796.75 |
| Bias-down: under | 2779.50 | 2779.50 |
| …would target | 2772.25 | 2772.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| 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)
Wednesday afternoon’s reaction to FOMC Minutes was the most volatile I’ve seen in years. Policy statements and Chairman Q&As are reliably opportunistic environments. So long as the committee plays rhetorical games with the gas pedal, the Minutes reaction should be wide-ranging again.
The relatively narrow overnight range had warned before the open to expect only a 3-4 point trending attempt, if any. Further proof the market lacked sponsorship came from neither of the morning’s bias signals even being attacked. The 2786.00 bias-up was tested at noon.
Now the rubber band was stretched, and the market was no longer in the middle of a dull range. The morning’s bounce was followed by an 11-point reaction down through the noon hour attacked the 2775.00 bias-down. It was just a warm-up for the FOMC reaction which spiked up to attack 2791.00, and reacted down 17 points to attack the 2773.25 overnight low.
2786.00 was recovered in time for the last 90 minutes to fluctuate narrowly around it through the close. No “unfinished business” was left outstanding. And having essentially only fluctuated at or around Tuesday’s final hour range, the session contained no predictive value.
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))
No improvement overnight after Tuesday’s break above the 1.1333 buy signal was due probably to its test also having held last Tuesday’s prior high and closing gap. But not reacting down left the door open to later improving in time for a second consecutive higher confirming close. Fresh highs attacking 1.1400 went out testing the 1.1375 resistance.
Gold Apr Contract (GC, ETF: (GLD))
Tuesday’s gap up through the outstanding 1333.00 target and its intraday extension to 1345.00 initially followed-through to attack 1350.00. Which held as the session high Wednesday, now having room for a pullback down to 1328.50.
Silver Mar Contract (SI, ETF: (SLV))
Already improving overnight to probe above 16.00 confirmed the “unfinished business” above at the 3-week old opening gap to 16.16. Rallying sharply intraday fulfilled the objective, while essentially touching the actual 3-week old intraday high.
30-year Treasury Mar Contract (US, ETF: (TLT))
Only touching Tuesday’s 147-05 intraday high overnight was unable to resume upside momentum before dipping back down to 146-11. The massive Ascending Triangle remains intact and vulenrable to breaking higher.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s flat-to-lower open barely attacked 55.75 before recovering to fresh highs at 57.60, confirming upside momentum remains intact from the confirmed breakout, greeting Thursday’s one-day delayed EIA report from a position of strength.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Eking out slightly higher highs overnight had not actually touched the 2.70 buy signal that must be recovered through Wednesday’s close to greet Thursday’s EIA report from a position of strength.
Mid-day Update… Choppy before the news.
FOMC Minutes coming shortly.
This morning’s upside held no surprises, other than there being upside. Trending was likely to be limited to 3-4 points, and that’s what was produced. 
An attraction at 2785.50 was touched, and its retest probed the 2786.00 bias-up signal before noon. Twice.
Reacting down through the noon hour reached fresh post-open lows, coming withing 3 ticks of this afternoon’s 2775.00 bias-down signal. Once again, like this morning, neither bias signal was touched while triggering no-bias.
For all of this volatility, price action remains within the range of yesterday’s final hour. Even reacting back up into the bias environment is now touching 2785.00. The bias-up signal is 2-1/2 points higher, coinciding with yesterday’s high. It should define the window’s upper-end if actually tested, which is possible in reaction to the 2:00 FOMC Minutes.
Reacting down to FOMC Minutes is also possible. Reliability is diminished when multiple timing windows overlap each other, along with durable trending. I would continue keeping smaller expectations for moves until the pattern proves otherwise.