Posts by Rod David
Pre-market Tour (recording & summary)
Two pre-open econ reports were greeted at yesterday’s 2182.25 cash session close. The reaction plunged to a fresh low at 2178.75. That’s not much, unless compared to the overnight range, and even to yesterday afternoon’s range. The gap back to yesterday’s close doesn’t require being filled before extending down, although that’s common first. Probing a new high without gapping up in this pattern would be likely to reverse back down sharply, but not necessarily on a Friday. No matter how likely to resolve down, nothing yet prevents extending higher — especially on a Friday.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Central banks on holiday?
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…
Thursday’s gap up to 2178.00-2179.00 was more successful than Wednesday’s gap up to 2178.00-2179.00. Both probed lower soon after the open, but Thursday recovered above the overnight highs. And then to fresh highs. And finally to new highs. Wednesday had declined through much of the day without gaining traction, so it’s interesting to note that it was followed by a rally. Thursday’s rally, meanwhile, didn’t gain traction, and created no higher attraction.
Overnight action’s new info…
New highs, again, and still no overnight enthusiasm about it. Not even rejection, which at least would anticipate volatility. Thursday’s late 5-point reaction down from 2185.50 didn’t extend. But a 3-point range expanded to 4 points at Europe’s opens, and is still trading flat with yesterday’s close. That’s just complacency, which is usually ended by exploding in one direction, or the other.
If, then…
Yesterday’s late, momentary surge was well-positioned to extend higher on a short-squeeze. Quickly absorbing the inflection point instead and reacting down suggests very little short interest is available up here to be squeezed, at this stage of the rally. Which has been an ongoing characteristic during the past several weeks, whether immediate or delayed one day. Pessimistic shorts would be bullish from a contrarian perspective. So far, their absence.is more of a “sell strength” signal than an outright sell. This being a Friday, reversing down from another fresh high or just dropping would likely extend through the noon hour. By the same token, this being a Friday, another fresh high that does NOT quickly reverse down could drift higher into the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2187.00 would be likely to trigger the 2185.50 bias-up signal at 10:15. Exiting the open under 2181.00 would be unlikely to trigger bias-up,
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2189.00 | 2185.50 |
| …would target | 2195.50 | 2192.00 |
| Bias-down: under | 2179.50 | 2176.00 |
| …would target | 2174.25 | 2170.75 |
| 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)
Thursday’s final hour entry flubbed the chance to confirm a sell signal under 2182.25. Its reaction up pierced a fresh high, coming once again to within 2-3 ticks of 2185.50. Rather than exploit the breakout attempt, price reversed back down into the afternoon’s range, probing a fresh low at 2180.25 after the cash session close.
That late fresh high was an opportunity to launch a new upleg, and was also flubbed. There seems to be very little short interest available to be squeezed. Pessimistic shorts would be bullish from a contrarian perspective. This is not. But it’s also not a sell signal — not yet..
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… Suspended animation
No unfinished business above, but no reaction.
This morning’s rally extended into noon at 2184.25. Narrow sideways ranging persisted through the noon hour, and also through the afternoon bias environment. Noise around the range came within 2-3 ticks of the 2185.50 unfinished business above, so it is now neutralized.
The bias environment exit was within the noon hour’s range. So was the final hour’s entry, but not before dipping to 2181.25. A fresh low would confirm momentum is reversing down, but the optimal timing has passed already. Back above 2184.25 would become more vulnerable to staging another upleg ahead of the close.