Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2253.00 | 2248.75 |
| …would target | 2259.00 | 2255.00 |
| Bias-down: under | 2246.00 | 2242.00 |
| …would target | 2242.25 | 2238.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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)
Wednesday ahead a three-day holiday weekend is similar in principle to expiration. That’s when we look for specific clues at the close to forecast any bias or trending into and out of the weekend. We do that on Wednesday because it’s the week’s most liquid session, so big money / strong hands is most active.
There’s nothing predictive ahead of a holiday, but it’s still the week’s best liquidity. The 24-point session-long plunge on this Wednesday is being blamed on institutional selling pressures. And that is perfectly plausible. It’s not in reaction to a news event that can be discounted or resolved. Its lifespan could last the week.
Meanwhile, the next lower attraction at 2243.00 which requires a retest was attacked to within 2 ticks Wednesday afternoon. That doesn’t qualify as neutralizing oversold RSIs. Its actual test could be isolated to the overnight, or to Thursday’s opening 15 minutes of volatility, clearing the way for reversing back up. Gapping up above 2250.00 could extend higher, too. Otherwise, there is greater potential for extending down to 2215.00 and 2205.00.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Trending.
REMINDER: The daily market Wrap begins at 3:33pm ET.
Taking the renewed bias-down signal with a grain of salt never resulted in also taking a buy signal. The afternoon’s 2249.00 bias-down target was officially broken at 1:20 but essentially part of the ongoing consolidation. Nevertheless, a shallow probe above it stopped far short of the nearest buy signal, and fresh lows were probed down to 2244.50.
1-minute RSI diverged positively into that low. Now recovering 2248.00 would be credible for launching a corrective bounce. But only a corrective bounce.
Having probed all prior lows except 2243.00 whose oversold RSIs require a retest, bouncing first would be only temporary. Extending down today to retest 2243.00 would not be required to hold. Its test wouldn’t even be any likelier to hold, being the product of an ongoing series of lower lows and lower highs.
Not yet testing 2243.00 today would allow its test overnight or briefly at tomorrow’s open to be isolated by a well-timed reversal up. Otherwise, its break would next target 2215.00 down to 2205.00.
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))
Overnight weakness fulfilled the requirement to fill the gap back down to 1.0435. Not closing above it Wednesday would be likely also to test the gap open at 1.0405 before a recovery would be credible. There is otherwise no “unfinished business below.”
Gold Feb Contract (GC, ETF: (GLD))
Shallower overnight strength than the previous night was restrained by Wednesday’s open to spend the day fluctuating narrowly around unchanged, yet to test the range’s lower-end at 1118.00.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday fluctuated narrowly around unchanged instead of exploiting Tuesday’s gap up, suggesting the gap back down to Friday’s close will be filled before a credible rally leg can begin.
30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s dip recovered Wednesday from only attacking 148-04 whose break would have targeted a new low close, rallying up to 149-02 that has defined the past week’s resistance.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming slightly overnight was retraced before Wednesday’s open, but intraday firming kept price within the orbit of recent highs that still require being retested regardless of the next leg’s direction.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Dipping slightly overnight and at Wednesday’s open nevertheless recovered 3.75 and extended sharply higher to test at least 3.82. Unless rejected immediately Thursday for being only the mechanical product of contracts rolling forward, a more substantial upleg is now underway — leaving unfinished business below.
Mid-day Update… Same bat-template.
Another aggressive downleg.
Almost two hours were spent before the noon hour ranging relatively narrowly between 2254.00-2258.00. Finally breaking lower into noon quickly began probing under the morning’s 2253.25 bias-down target. 
It was easily exceeded down to the afternoon’s 2249.00 bias-down target. And even that was exceeded during the noon hour down to 2246.50.
The noon hour’s exit and the bias timing window officially exceeded the bias-down target. This would renew the bias-down signal, next targeting 2243.50. But ranging at or under 2249.00 into the noon hour’s exit and the bias timing window deserves some skepticism.
The same template defines the same bullish scenario — that sellers have expended more energy than can be sustained, while fulfilling downside objectives. The template wasn’t fulfilled this morning because the bias-down target never held a test. This afternoon’s setup has the same chance or better. First, a buy signal must trigger, and the nearest one is 2250.00.
The original template otherwise remains in-play — that if the open were to put into play attractions below, then a multi-session decline will begin. Running its course too quickly — especially on Wednesday before a(nother) three-day holiday weekend — may be the only way to counteract the sudden sell-off.