Posts by Rod David
Mid-day Update… Stunning turn of events.
Retracing back to yesterday’s highs.
Testing and exceeding Wednesday’s 2139.50 prior high at 9:45 had put into play the next higher objective at 2144.00. Renewing the bias-up signal above its 2136.00 bias-up target at 10:15 had put it into play, too.
It was attacked to within 3 ticks, which is close enough to neutralize its attraction. RSIs diverged negatively. Potential to 2150.00 was cut short. Perhaps it was hawkish comments from BOE’s Carney that sent price down sharply.
The bias environment began lapsing at 11:30 back under its 2136.00 bias-up target, probing under its 2131.00 bias-up signal. That action would have put into play offsetting tests of both bias-down parameters, if done through 10:15. Doing it through 11:30 does at least undermine that upside sponsorship.
There’s no particular downside requirement, as this action would have triggered through the open. Yesterday’s 2126.25 cash session close has only been attacked to within 2 ticks. But this is Friday. And not quickly rejecting the late-morning slide for being a temporary correction would make recovering later much less likely.
Already, the decline has extended 3-minute RSI diverging positively twice. Extending down just once more without an interim bounce would suggest the morning’s drop is about to extend substantially. Avoiding the afternoon bias-down — preferably, triggering bias-up — may be the only way to avoid melting down into the weekend.
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2142.75 | 2136.00 |
| …would target | 2148.25 | 2141.50 |
| Bias-down: under | 2135.50 | 2128.75 |
| …would target | 2128.75 | 2122.00 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Squeeze.
Gap up extends through the open.
Wednesday’s 2139.50 prior high is relevant because it resolved down to fresh lows. Testing it during the opening 15 minutes of volatility wasn’t necessary. Coming so close without touching it would not have been bearish. But exceeding it through 9:45 would be bullish.
And it was exceeded through 9:45. Then a close-quarters Double Top (circled red) reacted down to 2138.50 in 3-4 minutes to avoid violating the upside momentum. Its recovery just touched fresh highs at 2143.25.
The 2136.00 bias-up target wasn’t even touched post-open, so it was exceeded easily to renew the bias-up signal. That’s at least 2144.00, which is now in-play. Above 2145.50 would target 2150.00.
RSIs are diverging negatively into the high. Friday morning’s bias signal tends to persist through the noon hour, so a reversal down isn’t likely. Reacting down could extend to 2137.50, and still be likely to recover back to the high.
Pre-market Tour (recording & summary)
The overnight rally to 2138.75 ultimately corrected down to 2132.00 before resuming. At least, trying to resume. A bounce back up to 2138.00 is within proximity of Wednesday’s 2139.50 prior high, where an opening test could offer more clarity of this morning’s intent. Not even testing the prior high would not in itself be bearish, so long as the opening action isn’t already reversing down altogether.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Testing the last downleg’s origin.
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…
Gapping down 16 points Thursday from Wednesday’s 2133.50 cash session close, then extended down another 10 points to test 2118.00 through the first half hour. Oversold RSIs at the low were left outstanding while all but 1 point of the drop was retraced into the final hour. The test of Wednesday’s “higher prior lows” reacted down to test 2124.00. Traction was gained by exiting the bias environment above the noon hour’s high, and then entering the final hour higher.
Overnight action’s new info…
Falling a little further into the Globex open attacked 2122.00. Sideways ranging up to 2128.50 barely acknowledged Europe’s opens, but eventually broke higher. Wednesday’s intraday high has been attacked to within 3 ticks at 2138.75.
If, then…
Recovering above 2131.00 had suggested trending up overnight to being rewarding Thursday’s rally for having gained traction. Gapping up to prior highs (from Wednesday) would risk inverting the setup for having fully rewarded it already. All of Thursday’s recovery could be retraced intraday to fresh lows targeting 2105.00 and 2095.00. But quickly recovering prior highs — preferably gapping up above them — would maintain the likelihood for the morning to trend up, with potential to 2150.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2139.50 would be likely also to exceed the 2136.00 bias-up target through 10:30 to renew the bias-up signal, next targeting 2144.00 and 2145.50. Exiting the open above 2133.00 would be likely at least to trigger bias-up. Exiting the open under 2128.75 would be unlikely to trigger bias-up.