Posts by Rod David
Post-open Review… Biting off just enough to chew.
Overnight rally accelerates into the open. Then stops.
This morning’s 2165.50 bias-up target had been tested and retested before the open. It was probed up to 2167.50 at the open. The session’s first 7 minutes surged to within 3 ticks of the 2172.50 renewed bias-up target.
Of course, bias-up had yet to trigger, let alone be renewed. After forming a pattern that was not distributive, and unlikely to be a top, a reaction down ultimately reached its limit at 2167.50. Its reaction recovered to actually touch 2172.50.
The renewed bias-up target was met. Only 1 -minute RSI was overbought. Price was responsive, and the pullback limit was soon violated. Bow a sell signal under 2169.50 has triggered. Noise alone could gravitate back down to its 2165.50 bias-up target. Selling pressure could attack the 2160.00 bias-up signal.
Exiting the bias environment at 11:30 above its 2170.00-2172.50 renewed bias-up target would not be a signal of its own. But it happens to coincide with two-week old “higher prior lows” that shouldn’t be exceeded unless the rally were extending substantially higher.
Otherwise, reversing back under the 2167.00 open would suggest a high is forming. The balance of the session would be vulnerable to reversing down sharply.
Pre-market Tour (recording & summary)
The overnight rally has extended to test the 2165.50 bias-up target, and to retest it by 1 point. Only 1-minute RSI became overbought on the original test, so it is now diverging negatively alone. Back under 2163.50 would be a compelling short-entry, being cognizant of a reversal down needing to be obvious much sooner rather than later. That could take the form of a post-open blip-up to fresh highs, first. But maintaining the gap up more than halfway through the opening 15 minutes of volatility would become exponentially less likely to reverse down.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Pushing higher.
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…
Third time was a charm. Okay, fourth. Like Monday and Tuesday before it, Wednesday gapped up to 2140.00 and tried probing higher. Unlike Monday and Tuesday before it, Wednesday’s intraday reaction down to 2132.00 was recovered, and the retry was very successful. It helped to get the FOMC statement out of the way. As did the attraction to last Monday’s highs around 2152.25-2153.25. Probing it up to 2157.50 before the close gained traction, and took RSIs overbought.
Overnight action’s new info…
The potential if not likely pullback under 2153.25 never got underway, as the support was only overlapped by 2 ticks before Europe’s opens. Their response to yesterday’s rally encouraged a breakout from the shallow range. Fresh highs are now testing 2164.00.
If, then…
Having neutralized the attraction above back to last Monday’s highs, the recovery’s momentum is in search of a new objective. Yesterday afternoon’s rally had gained traction, but was also rewarded well enough to enable an overnight corrective dip. No dip, no correction, and no refueling to help sustain the stretched rubber band. Maintaining a gap up could extend higher this morning, but even that would remain vulnerable to reversing down sharply this afternoon.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2167.00 would be likely also to exceed the 2165.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2162.50 would be likely to trigger the 2160.00 bias-up signal. Exiting the open under 2159.00 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2168.00 | 2160.00 |
| …would target | 2173.25 | 2165.50 |
| Bias-down: under | 2156.75 | 2149.00 |
| …would target | 2150.75 | 2142.75 |
| 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)
2152.25 is the highest calculable retracement of last Monday’s consolidation. Room for noise above it at 2153.25 was being overlapped as the positions-squaring window was entered. Not exceeded, but overlapped. Probing any higher, however much higher, would not have any predictive value.
In fact, fresh highs went on to probe significantly higher to 2157.50.While a reaction down would be required to retest that high, a reaction down isn’t any less likely. A reaction down may even be likelier. That’s despite Wednesday afternoon’s rally having gained traction by entering the final hour above the bias environment’s high, and then trending to fresh highs through the 3:10-3:20 proxy window. Already extending higher has rewarded those buyers.
Overbought RSIs at Wednesday’s high will require an eventual retest in case of reversing down overnight without yet probing higher. That would be the more bullish scenario, at least near-term to enable a morning rally. But extending the rally is not at all assured, as retesting last Monday’s highs has neutralized a great deal of sponsorship.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.