Posts by Rod David
Pre-market Tour (recording & summary)
The bounce off of 2126.25 extended up to 2132.75 before dipping again, now testing 2128.50. That’s a 61.8% retracement, so a bounce from here could reflect sentiment shifting upward for the morning. Otherwise, there’s not much room or time to retest the overnight low, and then to reject it, without getting sucked into another morning drop.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Digging deeper.
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…
Tuesday’s open back under Monday’s highs had isolated the overnight probe of fresh highs, which had fulfilled the 2150.00 objective. Retesting Monday’s 2140.50 low bounced high enough for long enough to avoid triggering bias-down. But its upside objective was ignored as the reversal down extended to enter the noon hour at the morning’s 2135.50 bias-down target. Bounces twice tested 2140.50 as resistance, and twice failed, again attacking 2135.50 into the close, making at least an obligatory probe lower likely. An offsetting test of the morning’s 2148.00 bias-up signal was left outstanding.
Overnight action’s new info…
Anxiousness ahead of AAPL’s post-close earnings is somewhat responsible for containing Tuesday afternoon’s range. Its negative reaction garnered sympathy as fresh lows developed quickly down to the 2132.00 area. Another downleg began at Europe’s opens in sympathy with Italian bank Monte Paschi resuming its slide. Fresh lows attacking 2126.25 have reacted up to test 2130.00.
If, then…
Tuesday’s open produced two normally powerful signals that happened to contradict each other. If they neutralized each other’s influence intraday, once seems to be winning out overnight. Isolating Monday night’s test of the 2150.00 objective has now reacted down almost 24 points. The decline’s timing has had weak-handed sponsorship at least twice — first, after yesterday’s open had held tests of prior lows, and now overnight. The overnight influence is legitimately bearish, but may be discounted sufficiently to prevent getting much more sympathy from intraday participants. Attracting sponsorship for a recovery need not be obvious immediately, but the overnight lows must hold to avoid probing well under expiration Friday’s 2123.25 low.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2125.00 would be likely also to exceed the 2127.75 bias-down target at 10:15 to renew the bias-down signal, next targeting 2121.25. Exiting the open under 2130.00 would be likely at least to trigger the 2133.50 bias-down signal at 1015. Exiting the open above 2133.50 would be unlikely to trigger bias-down.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2149.75 | 2143.75 |
| …would target | 2156.50 | 2150.50 |
| Bias-down: under | 2139.50 | 2133.50 |
| …would target | 2133.75 | 2127.75 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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)
Chipping away at the 2135.50 support of “lower prior highs” suggests that even the most bullish scenario is likely to probe lower before recovering. Not necessarily, but the corollary is to be careful if buying a recovery that begins immediately.
“Unfinished business above” does make resolving up possible, if not also likely. A test of Tuesday morning’s 2148.00 bias-up signal was left outstanding but not invalidated. The open formed an anchor (again), making at least a probe above its 2145.75 high likely.
Tuesday was an odd session both for the powerful mixed signals it produced, and for them seemingly neutralizing each other’s influence. Forming a “session-long decline” setup without triggering it is as bullish as it tends to be bearish. But it wasn’t. Meanwhile, isolating the probe above Monday’s high to the overnight can be very bearish. Barely.
Opinions are always varied in the market. They’re not very polarized, not yet. But there seems to be much less patience than the current trading range suggests.
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… Teetering.
Sellers on threshold of gaining traction.
The bias environment firmed off of its 2137.50 bias-down signal to come within 3 ticks of the of 2141.25, neutralizing its required test. Reversing back down probed under the noon hour’s low a little too late to gain traction. But entering the final hour under the bias environment’s low did.
It’s interesting that the 3:10-3:20 proxy window was in position to confirm the traction, but did not. Fresh lows coming out of the window would have likely tumbled into the close.
The alternative isn’t necessary, although back above 2138.25 could produce fresh afternoon highs before the close. And the only “unfinished business” is above at 2148.00.