Posts by Rod David
Post-open Review… Unwinding down.
Pre-open dive extends post-open.
The pre-open drop from 2086.00 to 2077.00 had firmed up to 2080.50. That’s this morning’s bias-up signal, and it was tested post-open, but not triggered at 10:15. Yellen’s opening remarks reiterated a rate-hike mentality, as expected.
So, this is a no-bias environment, its objective being an offsetting test of the 2070.75 bias-down signal. An offsetting test of the 2063.75 bias-down target would be in-play, too, had the 2086.00 bias-up target been touched post-open.
Meanwhile, bounces are likely to fail. And bounces are likely, as anxiousness breeds volatility during the first hour of Yellen’s Senate testimony. Its influences wanes significantly after that.
Pre-market Tour (recording & summary)
The overnight high was a surge that touched 2086.00. That’s this morning’s bias-up target, which is resistance, and its reaction dipped to attack 2082.00. Brexit polls triggered a plunge to 2077.00. Now a bounce is testing and retesting the 2080.50 bias-up signal, as resistance. Its resolution at 10:15 should signal trending’s direction this morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Hope springs, again.
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…
Brexit optimism was downsized by Yellen fears. Gapping up Sunday had extended higher overnight to 2097.50, relentlessly and single-mindedly. Monday’s open was greeted by a last-minute dip to 2082.00. Post-open action extended the rally to attack 2093.00. The noon hour sawed through 2082.00 and fell through the futures close to 2071.00. .
Overnight action’s new info…
2071.00 had been the room for noise under the afternoon’s 2074.50 objective. Literally, the drop was as deep as possible without putting into play any lower objectives. That maximum vulnerability was easily exploited by new Brexit polls that triggered a surge to 2083.00. Dipping back down to 2074.50 was gradually recovered overnight — relentlessly and single-mindedly, albeit less aggressively than Sunday night — up to 2086.00.
If, then…
Is hope “springing eternally,” or is it being batted about? If overnight action is the domain of Brexit, then intraday action may be a function of Yellen’s congressional testimony. That’s likelier to stress rate hike than QE, which was probably a big factor behind yesterday afternoon’s slide. But Brexit optimism has eviscerated that discount — right back up to the resistance of this morning’s 2086.00 bias-up target. Not quickly rejecting the overnight rally could extend to retest yesterday’s highs by 2 points. Reacting down from the gap up could extend yesterday afternoon’s slide back under last week’s lows.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2088.00 would be likely also to exceed the 2086.00 bias-up target through 10:15 to renew the bias-up signal. Exiting the open under 2076.75would be unlikely to trigger the 2080.50 bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2089.00 | 2080.50 |
| …would target | 2094.50 | 2086.00 |
| Bias-down: under | 2079.25 | 2070.75 |
| …would target | 2072.25 | 2063.75 |
| 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)
Sellers gained traction Monday afternoon after exiting the bias environment under the noon hour’s low. Already trading 10 points under the morning’s 2092.50 high, attracting new sponsorship wasn’t assured.
But the 3:10-3:20 window confirmed at 2081.00, and the drop extended down to 2074.75. That’s “lower prior highs” from Wednesday’s FOMC session — both before its reaction, and after.
And it’s natural support.
Now that anxiousness ahead of Yellen’s Senate testimony has been discounted, another bounce overnight is possible. Early Tuesday may be difficult, with Yellen’s remarks being released at 10:00am.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.