Posts by Rod David
Post-open Review… Anchored.
Gap up maintained, but not extended.
The overnight 10-point drop from fresh highs was already being retraced, when a pre-open surge ensured greeting the open above yesterday’s highs. The gap up to 2155.25 was extended 2 points. It didn’t extend higher, but neither was it rejected, not immediately. Maintaining the gap up above yesterday’s highs created an anchor.
Ultimately, dipping deep enough and for long enough failed to trigger bias-up. Having tested the bias-up signal, an offsetting test of the 2145.00 bias-down signal is in-play. Fresh lows after 10:15, already testing 2149.75, have confirmed
Gapping up could have extended higher. If not, then reversing down would be sponsored by weak hands, and therefore only temporary. Exiting the bias environment above the open’s 2157.25 high could invalidate the objective, but it would otherwise become “unfinished business below” if left outstanding.
Recovering back up to the open’s anchor could intervene before fulfilling the 2145.00 downside objective. Even if 2145.00 were met first, the reaction up could be very abrupt.
Pre-market Tour (recording & summary)
The overnight 10-point drop back down to 2148.00 had been retraced up to 2153.50. Consolidating there through the market Tour is now trying to break higher, testing 2155.00. That indicates a gap up, which would be very helpful to resuming yesterday’s rally this morning — instead of late-afternoon, at the earliest. Regardless of gapping up, not extending higher quickly would be vulnerable to trending back down this morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… The overnight gets 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…
Tuesday’s rally began after first retesting the 2133.25 overnight low by 2 ticks. Reacting up quickly touched 2148.25. Its correction was retraced entirely, in time to extend the recovery during the noon hour to attack 2153.00. Bias-up was confirmed by slightly higher highs at 2154.00, ensuring the 2155.00 bias-up target would become “unfinished business above.” The balance of the session hovered choppily just under that objective.
Overnight action’s new info…
Eventually dipping, Tuesday morning’s highs were probed by 1 point down to 2147.00. Already having firmed into Europe’s opens, a surge was triggered that extended up to 2158.00. That was short-lived, as it quickly became the head of a Head & Shoulders reversal pattern. Its reversal leg plunged, piercing yesterday morning’s highs by only 1 tick has now reacted back up to 2152.00.
If, then…
Hovering yesterday afternoon just 1 point under its 2154.00 target is pessimism, which can be bullish from a contrarian perspective. Surging overnight 3 points through its outstanding target illustrates the effect of pent-up demand created by the delay. The overnight high’s brevity suggests there remains enough pessimism to enable another rally post-open. But it also confirms the recovery remains tenuous. Resuming the rally this morning would still be credible, presumably by gapping up. “Unfinished business above” at 2175.50 could be further delayed by a morning dip, and altogether avoided by downtrending that breaks under 2143.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2151.25 would be unlikely to trigger the 2155.00 bias-up signal at 10:15. Exiting the open above 2157.50 would be likely to trigger bias-up. Exiting the open above 2161.75 would be likely also to exceed the 2160.25 bias-up target through 10:15 to renew the bias-up signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2162.50 | 2155.00 |
| …would target | 2167.75 | 2160.25 |
| Bias-down: under | 2152.50 | 2145.00 |
| …would target | 2146.50 | 2139.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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)
Tuesday’s rally created a new upside attraction at 2155.00. Being only 1 point above the intraday high might not seem very bullish. But the pessimism that inhibited fulfilling it can be bullish from a contrarian perspective. “Ineffectual pessimism,” since neither of two timing windows that attacked it were repulsed back down.
Still, the one-day recovery is too tenuous to be very reliable for recovering back to last week’s highs. But it is credible, despite not being optimal. Gapping up Wednesday would be credible for extending higher intraday, and narrowing the distance back to “unfinished business above” at 2175.50.
Trending down has room to 2143.50 before becoming vulnerable to resuming the decline. And trending down at this stage would likely be done very aggressively.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.