Posts by Rod David
Post-open Review… Inversion.
Post-open follow-through reflects meaningful strength.
The open’s gap up to 2150.50 extended up to 2154.25. More important than how high is for how long — not quickly rejecting the opening strength had undermined sellers.
A 3-point dip was recovered to fresh highs attacking 2156.00. And the 2153.00 bias-up target was exceeded through 10:15 to renew the bias-up signal. Next targeted are 2157.50 and 2160.00.
So much buying pressure to absorb yesterday’s bearish setup makes its resolution likely to be as bullish as the original setup could have been bearish. That means the morning is now likely to trend up. Not without resistance, twists and turns. But a fresh post-open low should be avoided.
Pre-market Tour (recording & summary)
More than just pierce yesterday’s late 2145.50 high, overnight strength has now extended up to 2151.25. But a pre-open dip down to 2147.00 is revealing the resistance above this morning’s 2147.75 bias-up signal. Not triggering it would point back down, keeping alive the post-open bearish setup created when yesterday’s decline gained traction. Otherwise, inverting that influence would be credible by extending up through the 2153.00 bias-up target, preferably already through the open.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Good to the last drop.
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 up slightly Tuesday held a test of the morning’s 2156.50 bias-up signal. Three times. Each test reacted down to test the 2148.75 bias-down signal, deeper and deeper. The third time was least charming, sliding through the afternoon to 2136.00. And that gained traction, exiting the bias environment under the noon hour’s low, then entering the final hour lower. Only 3-minute RSI was decisively oversold at the low, although 1-minute RSI was on the cusp.
Overnight action’s new info…
Choppy ranging has momentarily pierced positive territory twice, most recently attacking this morning’s 2147.75 bias-up signal to within 2 ticks. But yesterday’s 2143.50 cash session close keeps attracting price back down to it.
If, then…
Potential for retesting last week’s ~2169.00 high, let alone “unfinished business above” at 2175.50, depends on continuing to hold tests of 2138.00-2139.00 support. The problem is that the continued tests are chipping away at support. And now yesterday’s traction is mandating morning trending attempts, which chips away at support further. This is payrolls week, a high-profile report that is reliable for influencing price action as much before as after its release, beginning with today’s pre-open ADP report. “Wreversal Wednesday” would not be unusual in that context. And it may be the only path up, let alone for avoiding a much more bearish picture.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2148.75 would be likely to trigger the 2147.75 bias-up signal at 10:15. Exiting the open under 2142.00 would be unlikely to trigger bias-up. Exiting the open under 2136.75 would be likely to trigger the 2138.00 bias-down signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2155.00 | 2147.75 |
| …would target | 2160.00 | 2153.00 |
| Bias-down: under | 2145.00 | 2138.00 |
| …would target | 2140.25 | 2133.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
So, the big question on everyone’s mind after Tuesday’s slide to 2136.00 is whether the rally is salvageable. Even if only to retest last week’s ~2169.00 high, which was within proximity of unfinished business above at 2175.50.
Since the potential for a detour was 2138.00-2139.00, which was recovered through Tuesday’s close, the answer is yes. Yes, the rally can be salvaged. But since the decline gained traction for its effort, all but requiring trending down deeper Wednesday morning… well, you can see the difficulty.
There’s a reason I call it “Wreversal Wednesday,” for the session’s propensity to reverse a seemingly morning trend through the afternoon. If there’s an opportunity to salvage the rally from probing lower, then Wednesday’s the day to do it. But not back in rally mode at Wednesday’s close would suggest a much more bearish picture in-play.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.