Posts by Rod David
Pre-market Tour (recording & summary)
The earlier attack on Monday’s low in reaction to Yellen at ~2091.00 is now extending to fresh lows testing 2089.00. That’s a lot of selling pressure to expend relentlessly, and into the final minutes pre-open. If any session can extend this setup post-open, then it is Friday, as the selling becomes reinforced by anxiousness ahead of the weekend illiquidity. But even the most bearish scenario would try bouncing, anyway, so be sure not to marry any position too early.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Remember yesterday’s warning shot?
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…
Plus ça change, plus c’est la même chose. Thursday’s gap down deviated from the two prior opens that had gapped up. But it copied their post-open action by trying to rally anyway. “Unfinished business below” at 2097.75 dragged price down into the noon hour. But the balance of the session rallied to pierce the 2107.00-2110.00 resistance that had contained prior highs. To the degree that its 1-tick margin is reliable, the afternoon’s bias-up signal left unfinished business above at 2109.00.
Overnight action’s new info…
That 1-tick margin doesn’t seem reliable, at all. Already dipping a couple of points into Thursday’s close, Globex extended lower to test 2102.00 by midnight. That was the rally’s penultimate objective 2107.00, which had held through Monday and Tuesday’s close. It performed better as resistance than as support, which melted away at Europe’s opens, now attacking 2091.00.
If, then…
Monday’s noon hour reaction to Yellen’s comments had dipped sharply to attack 2091.00. The interim recovery into Wednesday’s high was 20 points higher. Monday was the last morning that had been signaled to rally. Tuesday and Wednesday mornings rallied anyway, dooming themselves to failure, and creating a lower attraction. The attraction was neutralized by Thursday’s warning shot across the bow, which went on to create a higher target. The higher target that has been suspicious since being signaled, now absolutely dubious, when considering last night’s action in the context of what we’ve known all along — that reversing down would unfold quickly if at all. None of which will matter this morning if the open recovers back above yesterday’s close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 back above 2100.50 would be unlikely to trigger the 2098.50 bias-down signal at 10:15. Exiting the open under 2092.25 would be unlikely to recover the 2093.25 bias-down target by 10:15 which would renew the bias-down signal, next targeting 2086.50.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2119.50 | 2109.50 |
| …would target | 2126.25 | 2116.25 |
| Bias-down: under | 2108.50 | 2098.50 |
| …would target | 2103.25 | 2093.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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)
Thursday was owned by the tick. The single tick.
The afternoon’s 2104.00 bias-up signal held its grace period by a single tick. Its 2109.00 bias-up target becomes “unfinished business above.” Meanwhile, buyers may have gained traction by exiting the bias environment 1 tick above the noon hour’s high, and entering the final hour 1 tick above the bias environment’s high.
The session was otherwise pessimistic for gapping down, probing a prior low and spending the entire session in negative territory. But it was “ineffectual pessimism” since relevant lows held through the close.
Friday Factors were relevant last week in exacerbating the gap down. They could be relevant this week, too. Resolving the unfinished business above at 2109.00 overnight can reverse back down before Friday’s open. The quasi-traction could invert to trend down through the morning.
Friday Factors can cut either way. Fresh highs could extend relentlessly into the close — as the pattern remains vulnerable to the upside so long as relevant lows are held through the close.
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… Decision time.
Afternoon bounce is at critical point.
Opening weakness had an opportunity to hold a test of yesterday’s unfinished business below 2097.75 and then bounce to the 2106.00 area. The objective’s noon hour test has now bounced to 2106.50.
Bouncing to the 2106.00 area this morning would have produced a new downleg, being early enough to attract counter-trend sponsorship. Testing it this afternoon could extend higher, as shorts cover before the nearing close.
The bounce is testing higher prior lows at the lower-end of yesterday afternoon’s bias environment. Recovering its resistance would resolve in a retest of yesterday’s 2110.75 high. Meanwhile, the bounce’s failure would target not only fresh lows, but also launch a new downleg, leaving no unfinished business above.