Posts by Rod David
Post-open Review… Gap up maintained.
lede .
The Employment Situation report was greeted at Thursday morning’s 2279.75 high. Its knee-jerk reaction spiked up and extended to Wednesday morning’s 2285.00 high. Extending higher greeted the open near the lowest of last Friday’s “higher prior lows” at 2287.25. Reacting down almost immediately post-open held 2283.00, and has recovered to attack 2292.00.
The 2287.25 bias-up target was still being overlapped at 10:15 to avoid renewing the bias-up signal. It’s still a bias-up environment, but not required to extend higher. Exiting the bias environment above 2290.00 would still target new highs, potentially up to 2327.00.
Meanwhile, the opening strength represents a test of last Friday’s “higher prior lows.” This natural resistance is capable of triggering a steep and/or deep corrective drop. But there’s room back down to 2286.25 before another dip can’t be considered only a temporary pullback.
The First Trade & Pre-open Tour Recording…
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 night’s drop to 2264.50 was recovered to open Thursday at 2271.00. Fulfilling the offsetting test of the 2278.75 bias-up signal defined the morning’s high. Its reaction down targeted 2271.00, which was met by noon. Overbought RSIs at the morning’s high didn’t prevent the balance of the session from only ranging choppily between 2271.00-2277.00. The close was within 1 point of 2275.00, after the three previous sessions had closed AT it, still unable to attract strong-handed buyers.
Overnight action’s new info…
The chop continued, first drifting down to test 2271.00, and then recovering to greet Europe’s opens back at 2277.00. Haas the chop ended? The recovery has extended to probe 3 ticks above yesterday’s 2279.75 high. But this morning’s Employment Situation report is looming, as is a pre-open Fed speaker.
If, then…
The overnight rally back to yesterday morning’s 2279.75 high offers an opportunity for one bullish setup, which would maintain the gap up and extend it. Its minimum objective would be last week’s “higher prior lows” beginning at 2287.00, with potential to new highs. Of course, rallying in advance of the Employment Situation report can easily become plunging in reaction to it. Still, the other bullish setup could form, by first probing a fresh low — presumably down to 2256.50 — and opening back above prior lows. That’s not very easy, so it’s not very likely, and reacting down to the report would more likely trend down. The next lower objective would be to test 2248.50..
First Trade…
[Click here to view the Bias parameters] No preliminary indications are available before an Employment Situation report.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2284.75 | 2281.00 |
| …would target | 2291.00 | 2287.25 |
| Bias-down: under | 2275.25 | 2271.50 |
| …would target | 2269.75 | 2266.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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 afternoon’s paralysis ahead of Friday morning’s Employment Situation report was masked by the wide range containing it. My last comments before noon identified a sell signal under 2275.75 targeting 2271.00. It was met at noon, and the balance of the afternoon essentially developed between them.
Actually, the afternoon high tested 2277.00. The last bounce retested it and finally closed above 2275.00. By 1 point. Closing there, or not, that’s still a big attraction for the fourth consecutive session.
Now there’s another attraction. Overbought RSIs at the morning’s 2279.75 high require a retest. That can be neutralized by retesting it overnight. And it’s not necessarily resistance — gapping up (and maintaining it) continues to be the bullish setup. Again.
One other bullish setup would be to recover from probing fresh low, i.e. isolating them to the overnight. There’s only a small chance that this pattern absorbs another fresh low, but it would point higher into the weekend. Otherwise, a downleg targeting 2248.50‘s retest should make itself obvious before the open.
There was no Market Wrap recording Thursday.
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))
Gapping up Thursday must close higher to make fresh highs likely Friday. There is otherwise a vulnerability to reversing back down into the weekend.
Gold Apr Contract (GC, ETF: (GLD))
Gaping up to fresh highs at 1227.50 was reversed back down to test the 1218.00 buy signal Thursday as support. Regardless of its resolution, the gap up will want to be revisited.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up Thursday through 17.63 was retraced to almost fill the gap back down to Wednesday’s close. Regardless of the pattern’s resolution, the gap up will want to be revisited.
30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping up to test the 151-11 maximum bounce limit Thursday was retraced to almost fill the gap back down to Wednesday’s 150-14 close. The decline has no excuse not to resume into the weekend, unless it isn’t going to resume, at all.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s close above 53.50 was extended Thursday morning to test 54.25 resistance. Its reaction down is trying to hold 53.50, whose break through the close would essentially reverse momentum back down.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Gapping down Thursday to Tuesday’s 3.12 close was reversed back up in reaction to the EIA report. Its complete retracement is not bearish, but neither does it yet qualify for completing a bottom.