Posts by Rod David
Pre-market Tour (recording & summary)
The overnight drop back up yesterday’s 2127.75 cash session close had been completely recovered. A blip-up touched yesterday’s 2129.50 again, and reacted down to within 1 tick of 2123.25. Holding or not holding a test of 2123.25 through the open would make the 2125.25 bias-down signal less or more likely to trigger, respectively. Simply avoiding negative territory would make a short-squeeze likelier, too. Otherwise, there is plenty of downside potential into and out of the weekend.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Big, big test for a big, big day.
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…
Oversold RSIs accompanied Thursday’s late-afternoon retest of the morning’s oversold RSIs at 2126.75. Another bounce would be doomed to failure, while making more than a retest likely. Firming up to 2129.50 ended the cash session at 2127.75. Reaction to AMZN’s earnings miss triggered a plunge to fresh lows, touching the 2122.50 target as futures closed.
Overnight action’s new info…
Reaction up from the post-close 2122.50 target was immediate and didn’t stop until touching 2129.50. Flat-to-lower ranging broke down sharply at Europe’s opens and slid to 2116.00. Its 6-point bounce was retraced almost entirely. That happened quickly, as has a 12-point rally back above yesterday’s lows which is now testing the 2127.75 cash session close.
If, then…
Wednesday morning’s 2125.00 low had retraced last Friday’s expiration range as deeply as possible without also requiring at least a probe under 2118.00. Isolating Thursday’s post-close dip under 2125.00 could have been dismissed, but overnight action has fulfilled the lower probe, anyway. Opening Friday in positive territory would isolate it, and could avoid the risk of extending down through it intraday. Reversing momentum up this morning could trigger a massive short-squeeze, but barely opening in positive territory probably wouldn’t suffice. Currently bouncing back up to unchanged remains vulnerable to failing already well before the open, and had better extend higher soon to avoid entering the weekend challenging 2095.00 and potentially 2082.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2123.25 would be likely also to trigger the 2125.25 bias-down signal at 10:15. Exiting the open above 2127.00 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2137.25 | 2131.25 |
| …would target | 2143.25 | 2137.50 |
| Bias-down: under | 2131.00 | 2125.25 |
| …would target | 2124.50 | 2118.50 |
| Signal status: LATE NO-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 late-afternoon retest of this morning’s oversold RSIs at 2126.75 was itself accompanied by oversold RSIs. Any bounce was again doomed to failure, and fresh lows were likely to test this morning’s 2122.50 bias-down target. Ending the cash session above the morning’s lows at 2127.75 quickly broke lower to touch 2122.50 into the futures close.
AMZN’s earnings miss may have been the catalyst for the post-close break. That didn’t help alleviate any anxiousness ahead of GGOGL’s earnings, each having greeted earnings from positions of weakness. Individual company earnings rarely affect the broader market’s price trend, so the knee-jerk reaction is vulnerable to reversing back up Friday. Otherwise, lower lows could extend into the afternoon.
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… Heading down.
Mid-day bounce is faltering.
this morning’s 2126.75 low held. The interim bounce up to 2136.50 peaked during the noon hour. The bias environment ranged sideways. But the last 60-90 minutes have so far trended down.
Oversold RSIs at the low required an eventual retest. It was just retested, but RSIs are oversold again to prevent neutralizing the attraction. Back above 2131.00 would start to signal another detour, but otherwise fresh lows are likely to test 2122.50.
Fresh lows this morning or earlier this afternoon would have been likely to trigger the domino effect targeting 2118.00 and lower. That’s still possible, but less likely for having resumed downtrending this late in the day.