Posts by Rod David
Post-open Review… Moment of truth.
Fresh lows are the beginning, or the end.
Wide, choppy ranging since before midnight had been contained largely within 2649.00-2656.00. The opening 15 minutes of volatility chopped around just below toward the overnight range’s upper-end. But the opening 15 minutes did not trend, so no downside momentum was indicated.
Breaking lower to 2641.25 held a test and retest of the 61.8% retracement of the gap between Thursday’s cash session close and Friday’s opening print. This is the last line of defense I had noted during this morning’s Market Tour. It’s also the only price action to have developed under Friday’s range — all of the selling since then is otherwise an Inside Day.
Reacting up just tested 2650.00, and could extend up to 2652.50-2654.50, while still being only temporary. Recovering back above 2656.00-2657.50 during the bias environment could end the pullback and keep 2710.00 in-play. Otherwise, back under 2645.00 (being tested now) could resume the decline. And closing under 2656.00, after having opened under it, would invalidate 2710.00 and probably also end the bear market rally.
The First Trade & Pre-open Tour Recording… Opening with a punch.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Friday gapped up to the rally’s next higher objective at 2656.00, and soon began a dip that attacked Thursday’s 2645.50 high. The bias timing window touched 2647.00 and resumed rallying through the noon hour to 2677.25. The afternoon bias environment’s dip to 2662.00 was retraced to 2670.50 through the cash session close, and to 2672.50 through the futures close, and then to 2677.75. The bullish WedEX was a wash by the cash session close, and marginally successful by the futures close.
Overnight action’s new info…
The market was under pressure from Sunday night’s open, which gapped down to 2669.00-2673.50, and continued falling through Monday morning to test 2656.00 — what was Friday’s opening print, and what had been the rally’s next higher objective and . Bouncing to 2666.00 through last night’s open was reversed down to 2649.50, which is now being retested after an interim bounce to 2658.00.
If, then… (notes to accompany the Tour recording)
Closing above 2656.00 Friday put into play the rally’s next higher objective at 2701.00. Closing firmly above its room for noise at 2668.50 would have helped to confirm the new target, if not also resume the rally aggressively and without delay. However, still overlapping 2668.50 at Friday’s close left the door a little wider open to rejecting the new target, by both opening and closing back under 2656.00. That’s currently indicated, but with plenty of time to recover pre-open if the market intends. Meanwhile, irrelevant to the open gapping down, the WedEX’s influence may insert an aggressively bullish post-open detour through this morning’s bias environment. A session-long decline setup could form by gapping down under its 2662.00 afternoon low after having trended up into Friday’s close, but it’s not very reliable when developed over a weekend, let alone over a three-day weekend. And having trended down relentlessly since the last close, all while being contained within Friday’s range, it may be difficult for overnight sponsorship to find opening reinforcements that will take price lower.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2656.00 would be likely also to exceed the 2657.50 bias-down target at 10:15 to renew the bias-down signal. Exiting the open under 2663.50 would be likely at least to trigger the 2666.00 bias-down signal at 10:15.
Look ahead: Economic Calendar – for Tue Jan 22, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is very slow for a holiday-shortened week. And it doesn’t get much busier, although the coming reports are higher-profile and have track records for influencing price action.
Redbook
8:55 AM ET
Existing Home Sales
10:00 AM ET
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2676.75 | 2677.00 |
| …would target | 2687.25 | 2687.50 |
| Bias-down: under | 2665.50 | 2666.00 |
| …would target | 2657.00 | 2657.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Friday’s gap up to the rally’s next higher objective at 2656.00 took the entire bias timing window through 10:15 to absorb a dip to 2647.00. But the rally resumed and extended higher through the noon hour to 2677.25. That was 3 ticks short of the afternoon’s bias-up target, and the bias environment only dipped down to 2662.00. The final hour firmed to 2670.50 through the cash session close, and to 2672.50 through the futures close, and then to 2677.75.
The bullish WedEX’s success is gauged by a comparison to the bias environment’s high. Which the cash session close barely attacked and the futures close barely touched. The post-close fresh session high tilts the scale, so that we should at least be aware of Tuesday morning’s potential for trending up aggressively from the open.
Closing above 2656.00 has put into play the rally’s next higher objective at 2701.00. Closing firmly above its room for noise at 2668.50 would have expected the rally to extend higher aggressively and without delay. Only overlapping it at Friday’s close leaves the door open to rejecting the close above 2656.00 by immediately reversing back under it.
Details and other markets coverage are discussed in the post-market Wrap recording here.
REMINDER: NO SATURDAY REVIEW THIS WEEKEND DUE TO THE HOLIDAY.