Posts by Rod David
Post-open Review… Grudgingly exploiting the gap up.
Post-open dip recovers to fresh highs.
The open gapped up and quickly worked higher through the 2166.25 bias-up signal by 5 ticks. Reacting down to 2163.25 tested yesterday afternoon’s 2164.50 high as support. It was still being overlapped as the opening 15 minutes of volatility lapsed. It was not optimal behavior for maintaining a gap up.
But it held.
And a quick retest of the reaction low was reversed up sharply, extending to attack the 2169.75 overnight highs to within 3 ticks. This is a bias-up environment. Its 2171.75 bias-up target is in-play. It’s the next domino on the way back up to 2180.00 and possibly (momentarily) higher.
None of which precludes there being a corrective dip.
In fact, 1-minute RSI avoided touching overbought and then deteriorated. Now a reaction down is testing the 2166.25 bias-up signal as support. Its test should ultimately hold. And while stopping pessimistically short of the overnight high is potentially bullish from a contrarian perspective, that hasn’t aided enabled retesting at least two other overnight highs in the past week.
But so long as the bias environment doesn’t lapse back under yesterday afternoon’s 2164.50 high, the likely resolution remains up. Back under 2164.50 would otherwise start to point more substantially down.
Pre-market Tour (recording & summary)
The reaction down from attacking 2170.00 overnight has now twice tested Friday afternoon’s 2162.00 high, and twice bounced out of it. The second bounce extended back above yesterday afternoon’s 2164.00 high to 2167.50. Now its reaction down is testing 2164.00 as support.
Maintaining a gap up above 2164.00 is the minimum requirement for immediately resuming yesterday afternoon’s rally. Preferably also extending quickly back above yesterday morning’s 2168.00 high. Otherwise, back under 2161.00-2162.00 would be vulnerable and increasingly likely to launch a deeper corrective dip.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Getting on with it?
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…
Monday pre-open bounce above Friday’s 2161.00-2162.000 highs up to 2169.50 didn’t even attack Sunday night’s 2174.50 highs. A brief post-open rally effort stopped even shorter. The balance of Monday’s session was spent backing-and-filling back under Friday’s highs. Rallying off of the noon hour’s 2152.50 low extended up to 2164.00, and was poised to rally through the final hour, but a Presidential press conference paralyzed buyers through the close.
Overnight action’s new info…
Monday afternoon’s recovery resumed with little delay, probing above 2164.00 before midnight. Extending higher through Europe’s opens eventually attacked 2170.00. Too much, too soon? The past couple of hours have been sliding, momentarily attacking 2162.00.
If, then…
Retracing the late dip from 2164.00 was not assured, but it would target a retest of Monday morning’s high up to 2169.00. That was done overnight. So, is the reaction down just a temporary correction, or will last night’s rally be ignored intraday like last Wednesday night and Sunday night’s rallies? The dip is probably only temporary, so long as Friday’s 2161.00-2162.000 highs hold as support. A rally shouldn’t even test Monday afternoon’s 2164.00 high post-open, and preferably gap up to and/or through 2169.00. That would again position the market for retesting the 2180.00 area, and possibly higher. By the same token, opening under Friday’s 2161.00-2162.000 highs would be likely to probe under Friday and Monday’s lows, targeting 2141.00 for starters.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2161.00 would be unlikely to trigger the 2166.25 bias-up signal at 10:15. Exiting the open above 2169.00 would be likely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2169.25 | 2166.25 |
| …would target | 2174.75 | 2171.75 |
| Bias-down: under | 2158.00 | 2155.00 |
| …would target | 2152.00 | 2149.00 |
| Signal status: BIAS-UP | 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)
Did Obama’s press conference prevent a late rally? Firming into the final hour probed fresh afternoon highs up to 2164.00. A buy signal had triggered, but RSIs were unable to reach overbought. Extending higher wasn’t required, but hovering above it for a half-hour didn’t reject the signal.
Only when Obama began speaking did the hovering stop. Price slid sharply to 2157.75. And then it bounced to 4 points, ranging sideways into the close. But now the speaking has stopped. Retracing the late break from 2164.00 — which is not assured — would target a retest of the morning’s high up to 2169.00. And that would again position the market for retesting the 2180.00 area, and possibly higher.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.