Posts by Rod David
Post-open Review… noN decision actually is no decision.
If Confucius were a trader.
Confucius said, “no decision IS a decision.” 
This morning’s open said, “noN-bias.” And that really IS not a bias.
At least no-bias would have put into play an offsetting test of the bias-up signal. Bias-down would have put into play the bias-down target. But noN-bias was triggered by overlapping 2289.75 at 10:15 and again at 10:30. This morning’s window has no requirements of it.
Fortunately, we do have a bigger picture roadmap. Regardless of being deep or steep, only a brief dip this morning would be appropriate for resuming the rally today. Bias-down would have fit if resolved quickly. So, resuming the rally today may wait until the bias environment begins lapsing, but need not.
By the same token, exiting the bias environment in decline to fresh lows would not be bullish. Probing a fresh low before then could recover. Otherwise, it would be yet another reflection of weakness, along with not confirming Wednesday’s breakout, and Thursday’s flat, narrow ranging.
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…
Thursday’s open and close were essentially flat with each other, and essentially flat with Wednesday’s 2294.00 close. This seemed to ignore the prior two sessions’ rally, as much as the overnight’s rally — although attraction to the overnight “new Globex trend extreme” may have inhibited trending down. Anyway, the open’s dip back down to the 2291.75 overnight low was the opportunity to reverse down, but it held. Probing under it later was less about continued selling, and more about searching for stronger buyers.
Overnight action’s new info…
No hint of trending appeared until rallying to greet Europe’s opens back at Thursday morning’s 2296.75 high. And like Thursday morning, the overnight rally attempt was reversed back down entirely to 2291.25. Bouncing back to yesterday’s 2294.00 close has yet to resolve either way.
If, then…
Yesterdays narrowly ranging session was more predictive than its size. Predictive, if not very productive. Its backing-and-filling followed a second consecutive surge to new highs. That was Tuesday and Wednesday, with Wednesday being an actual breakout closing above prior highs. So, Thursday missed the opportunity to confirm Wednesday’s breakout. It did leave outstanding a higher objective that was put into play overnight at the new Globex trend extreme. But repeating Thursday’s pause throughout Friday would undermine this leg’s 2327.00 objective, since it requires being met by an aggressive rally. After Thursday missed the opportunity to confirm a breakout, Friday not exploiting the proximity to a new high close would be doubly concerning. Any further pullback today can be deep and probably steep, but it must be brief to allow time for recovering and reversing up. Similarly, reacting down intraday from retesting Wednesday night’s Globex trend extreme would not only undermine the rally’s momentum, but possibly reverse momentum down.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2298.75 would be likely to trigger the bias-up signal at 10:15. Exiting the open under 2292.00 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2301.25 | 2296.75 |
| …would target | 2305.50 | 2301.00 |
| Bias-down: under | 2294.25 | 2289.75 |
| …would target | 2288.50 | 2284.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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’s unchanged open at 2294.00 offered no suggestion there had been an overnight rally to new highs. But the open’s inability to reverse down probably has the overnight high’s attraction to blame. Complexity while forming the “new Globex trend extreme” at 2299.50 requires its eventual retest intraday.
Probing lower into and out of the noon hour finally bottomed at 2289.50. And a bias-down signal was narrowly avoided. Reacting up to 2294.75 threatened to reverse the trend up. But the threat soon passed, as the final hour’s entry failed to exploit the opportunity to extend higher.
Stronger buyers had not been attracted. The first low wasn’t deep enough, so could a second low steep enough? In fact, the low was attacked to within 3 ticks when the position-squaring window opened. Its test held, but the close was only unchanged from the open.
Perhaps Thursday’s inhibition against resuming the rally was due to anxiousness ahead of several high-profile post-close earnings (e.g. GOOGL, INTC, MSFT, SBUX, WYNN). Well, the earnings are now history. A deeper, steeper dip remains possible, but resuming the rally remains likely, especially by gapping up Friday.
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))
Three days of fluctuating narrowly around last week’s high finally started behaving as if a Double Top had formed, gapping down and probing lower Thursday morning. The 1.0690 sell signal was tested, and a second consecutive lower close on Friday would reverse the trend down.
Gold Feb Contract (GC, ETF: (GLD))
Gapping down again Thursday probed under the 1195.00 sell signal to test 1184.00 support. A top has very likely formed, although the potential for a corrective bounce can’t yet be dismissed.
Silver Mar Contract (SI, ETF: (SLV))
Thursday’s dip tested the 16.75 sell signal that had been attacked Wednesday. Closing under it would be entirely credible for reversing the trend down, leaving no unfinished business above but an eventual higher close.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending even deeper overnight touched 148-30, piercing the year’s opening gap down that had recovered to close positive that day. There is no bullish reason for its retest, but its test did react up intraday to attack 150-00.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Bouncing Thursday attacked the range’s 54.25 upper-end, which allows the sell signal to be raised to 53.25. Closing above 54.25 could suggest a bigger bounce underway, but not reliable.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of strength. That didn’t prevent extending higher overnight to gap up above all prior relative highs, or extending higher intraday to 3.50. While closing above the 3.40 prior highs is a breakout, closing under the open’s gap up suggests that Friday won’t produce a second consecutive higher close. Higher highs would target 3.65. Otherwise, the weekend should be greeted reversing back down to 3.27 and to test 3.12.