Posts by Rod David
Pre-market Tour (recording & summary)
Reacting down from the 2182.75 overnight high has extended through last night’s initial 2178.75 low, to fresh lows attacking 2176.00. With yesterday afternoon’s rally not gaining traction, not gapping up would be unlikely to rally this morning. But without a particular attraction in-play below, dipping further need not be aggressive. So, I’d rather short strength at 2180.00-2181.25 than weakness. By the same token, I wouldn’t want to be short much above 2181.25 as a failed rally effort would still be possible.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… False start.
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…
Higher and higher highs into and out of Wednesday’s FOMC Minutes were accompanied by overbought RSIs, requiring interim reactions down to recover. Which they did. RSIs didn’t get overbought at the last high’s 2179.75 peak, but that didn’t stop its retest from extending to 2181.00 into the close. Oversold RSIs were left outstanding at Wednesday’s 2165.50 low. Ironically, that low had probed the rally’s last relative low, so its recovery triggered a passively bullish WedEX
Overnight action’s new info…
Wednesday’s closing strength extended momentarily to touch 2182.00, and then began a dip back down to 2178.75. Recovering only probed fresh highs by 2-3 ticks before reversing back down to 2178.75, which is still being tested now.
If, then…
Invalidating the bullish WedEX would require gapping down Thursday under Wednesday afternoon’s 2169.25 low, or lower (which would also form a “session-long decline” setup). That’s not currently indicated, but neither yesterday’s recovery extending. Deteriorating RSIs into Wednesday’s last high opened the door to an overnight pullback. Avoiding that doesn’t shut the door to a pullback intraday Thursday. Having failed to gain traction Wednesday afternoon, the rally is unlikely to extend this morning anyway — not without maintaining a gap up.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2178.00 would be unlikely to trigger the 2182.50 bias-up signal at 10:15. Exiting the open above 2183.50 would be likely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2185.25 | 2182.50 |
| …would target | 2190.50 | 2187.75 |
| Bias-down: under | 2176.25 | 2173.50 |
| …would target | 2170.75 | 2168.00 |
| Signal status: NO-BIAS | 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)
Higher and higher highs into and out of Wednesday’s FOMC Minutes kept requiring interim reactions down to recover. Which they did. RSIs didn’t get overbought on the last high’s 2179.75 retest, and RSIs deteriorated the retest of its 2181.00 high. So, an immediate pullback wouldn’t be surprising, and wouldn’t be required to recover.
Oversold RSIs at Wednesday’s 2165.50 low preceded the noon hour and so it requires an eventual retest. That doesn’t prevent first extending Wednesday afternoon’s recovery to back up into Monday’s range, attacking or probing its high.
Aiding an extended recovery would be a bullish WedEX signal that signaled at Wednesday’s close. Passive, for having held a test of a prior low, and not active since no relevant high was recovered. Invalidating the signal would require gapping down Thursday under Wednesday afternoon’s 2169.25 low, or lower (which would also form a “session-long decline” setup).
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… Teasing.
Spending a lot of time at the highs.
As was suspected, the FOMC Minutes hawkish headlines were in contrast to the earlier dovish Fed speaker. So, the rally from 2165.50 up to 2176.75 was corrected, quickly , by a 61.8% retracement down to 2169.75.
That was recovered even more quickly, on the way to fresh session highs attacking 2180.00. In the hour since then, price has ranged narrowly and choppily around 2177.00.
Overbought RSIs at the 2179.75 high require its retest. And at this late stage, retesting the high would be likely to extend. Reversing down from here instead would have room to 2172.50 before suggesting a deeper drop underway.