Posts by Rod David
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…
Monday’s open gapped down 8 points to its 2281.00 bias-down target. The next 90 minutes plunged 18 points more down to 2263.25. Lower prior highs down to 2275.00 didn’t contain the drop and launch the next upleg, which Thursday and Friday’s shallower dips had tried, and failed. Or, did it? Rallying through the afternoon peaked upon touching its 2277.00 maximum upside target. It originated too late to be the product of strong hands, but its reaction down closed at 2275.00. Oversold RSIs were left outstanding at the low.
Overnight action’s new info…
Having fulfilled buying pressure up to 2277.00 with weak-handed sponsorship, a reaction down became highly likely. Narrow ranging supported by 2275.00 ended with the BOJ’s expected unchanged policy statement. Quickly breaking lower attacked 2268.00, which then supported a somewhat narrow range. This range broke higher, retracing all the way back up to 2275.00. Its reaction down to 2270.25 has been recovered almost entirely.
If, then…
Monday afternoon’s bounce off its oversold lows had waited too long to extend for its sponsorship to be strong-handed. Isolating the doomed bounce’s retracement to the overnight by opening back above 2275.00 could be sufficient to resume the rally Tuesday afternoon. Trying to trend up too aggressively already Tuesday morning might extend to higher prior lows at 2287.00-2289.00 before failing. Oversold RSIs at Monday’s 2263.25 low require an eventual retest, which would be the likely attraction to not opening back above 2275.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2275.00 would be unlikely to trigger the 2271.50 bias-down signal at 10:15. Exiting the open under 2269.00 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2282.50 | 2278.00 |
| …would target | 2287.75 | 2283.25 |
| Bias-down: under | 2276.00 | 2271.50 |
| …would target | 2270.50 | 2266.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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)
Monday afternoon’s bounce peaked just after the bias environment began lapsing at 2:30 at 2273.00. Rather than extend higher, the 3:10-3:20 proxy window reacted down to 2269.00. It was too late for strong-handed buyers to push price higher, but that didn’t prevent rallying, anyway.
And not by just a little. Potential to 2275.00 and 2277.00 was fully satisfied at the bounce’s peak. Their potential for attracting price higher into rally mode overnight was suddenly inverted. Now, global participants have a chance to sell a bounce after missing Monday morning’s sell-off.
Oversold RSIs at Monday’s 2263.25 low require an eventual retest. That could be much sooner, rather than later, if Tuesday’s open isn’t already gapping up above higher prior lows at 2287.00-2289.00. Just rallying post-open to higher prior lows would more likely hold their resistance and reverse down substantially
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))
Sunday night’s bounce touched the 1.0760 bounce limit, and then reversed down sharply to gap down under last week’s lows to test 1.0645. The morning’s bounce filled the gap back to Friday’s 1.0715 close.
Gold Feb Contract (GC, ETF: (GLD))
Bouncing Sunday night touched the 1195.00 higher prior low, whose recovery intraday is likely also to test 1209.00. Regardless of its degree the current bounce can’t be considered more than just a temporary correction.
Silver Mar Contract (SI, ETF: (SLV))
Firming Sunday night helps to keep in-play the potential not only for a higher high, but also for that to be sustained through the close to satisfy the rally’s requirement for at least one more higher close.
30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping down slightly Monday after having firmed Sunday night was in-line with the corrective bounce measurements. Stocks dropping hard may have prevented the decline’s resumption in a flight-to-safety.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-lower ranging at Monday’s open pierced the 52.50 sell signal that was attacked Friday, and which had been narrowly avoided on Wednesday. Finally breaking it after the detour would make it likely to be more productive faster.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Gapping down Monday confirmed that Friday’s intraday recovery was only a temporary correction, and that the attraction back down to and through the 3.12 low remained intact.
Mid-day Update… Getting a little too comfy.
REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.
This morning’s drop ultimately touched 2263.25. This allowed room for a corrective bounce up to 2271.00, 
which was touched before noon. It has yet to be exceeded, which would essentially target 2278.00.
And there is no requirement to bounce any higher.
The only requirement to bouncing higher is to start bouncing today. But sideways ranging through the noon hour has avoided extending higher. And despite this afternoon’s no-bias environment having room up to its 2275.75 bias-up signal, its 2266.00 bias-down signal is being attacked.
Oversold RSIs at the 2263.25 low require its retest, eventually. That would be the likely objective if 2266.00 were probed during the no-bias environment. It would be an objective if probed after the bias environment begins lapsing, but could also give way to a new downleg that resumes the decline.
Meanwhile, back above 2270.50 would start to signal a bigger bounce underway, regardless of the delay. And delaying the recovery — even if oversold RSIs were left outstanding — could still produce new highs.