Posts by Rod David
Post-open Review… The longest yard.
Holding the pullback now allows one more rally leg.
Yesterday morning’s 2169.50 “lower prior highs” had been tested thoroughly pre-open. But the retest came just a couple of minutes before coming within 3-5 minutes of the open. That was too early to rely on it serving as if the lower prior highs had been tested post-open.
None of which prevented bouncing into and out of the open to probe 2174.25 by 1 point. That’s where a short-entry was likely. Its reaction down to 2170.00 stopped 2 ticks short of touching 2169.50.
Since then, the 2173.25 bias-down signal almost triggered, and almost didn’t. It ultimately triggered noN-bias. Not a bias-down targeting fresh lows, and not a no-bias that requires an offsetting test of the 2181.25 bias-up signal.
But I’m expecting a probe above yesterday’s 2178.00 cash session high, anyway. That’s the reward to yesterday afternoon’s buyers for having gained traction. Not necessarily before noon, regardless of the potential for extending higher to also retest the overnight high. But probably not if the bias environment is exited under 2173.25.
Pre-market Tour (recording & summary)
The overnight drop’s 2169.00 low had reacted up to 2172.50. But ranging since then has now returned down to 2169.00, all but assuring a test of yesterday morning’s 2169.50 “lower prior highs.” Its test wasn’t necessary before rallying this morning, but it can be very constructive… if held. Otherwise, the rally will be on defense this morning, and sellers might be on offense.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Thin air.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
The ongoing delay in retesting last Wednesday night’s 2180.50 high looked promising through Tuesday’s open. Indeed, the morning chopped around under the 2169.75 overnight high. But not until Tuesday afternoon when the no-bias environment had barely begun lapsing did a rally from its 2165.00 low break to fresh session highs. The breakout extended almost relentlessly up to 2178.00 into the cash session close, then to within 1 tick of 2180.00 at the futures close. Buyers gained traction.
Overnight action’s new info…
Brief consolidation up to 2180.00 suddenly exploded higher to touch 2185.00. Its quick reaction down to 2181.00 eventually gave way, and the balance of the night has trended back down into negative territory. Now printing fresh lows down to 2169.00 testing yesterday morning’s 2169.50 “lower prior highs.”
If, then…
The pattern we’ve been monitoring continues to behave as expected — retesting 2180.00, up to 2185.00-2186.00, and being vulnerable to reversing down sharply. The only wild card is all of this playing out overnight instead of intraday. A morning rally still gets a benefit of the doubt, since yesterday’s rally gained traction for its efforts. Trending up can begin from gapping down, and would still be likely to probe fresh highs, like the upper-end of 2185.00-2186.00. First testing yesterday morning’s 2169.50 “lower prior highs” might be necessary, if that’s still being attacked near the open. That would be dangerous, since gapping down under 2167.00 would form a “session-long decline” setup. The bearish scenario wasn’t very unlikely before testing the upside objectives… which now have been tested.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2166.75 would be likely also to exceed the 2168.50 bias-down target at 10:15 to renew the bias-down signal. Exiting the open at 9:45 under 2170.00 would be likely to at least trigger the 2173.25 bias-down signal at 10:15. Exiting the open above 2175.50 would be unlikely to trigger bias-down.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2184.25 | 2181.25 |
| …would target | 2189.00 | 2186.00 |
| Bias-down: under | 2176.25 | 2173.25 |
| …would target | 2191.50 | 2168.50 |
| 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.
Post-market Wrap (recording & summary)
The ongoing delay in repeating last Wednesday night’s test of 2180.00 was resolved finally during Tuesday afternoon’s last 60-90 minutes. The no-bias environment had barely lapsed (and really hadn’t yet) before extending an earlier buy signal at 2167.00 up to 2178.00. Post-close action jumped to within 1 tick of 2180.00.
But buyers gained traction for their efforts, so trending up further Wednesday morning is likely. Trending up can begin from gapping down, but should nevertheless last the morning and probe fresh highs. Fresh highs should include 2185.00-2186.00, with room for noise up to 2192.00.
Inverting the signal requires forming a “session-long decline” setup by gapping down under 2167.00. And maintaining it. Not impossible, not even very unlikely — only a little of both.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.