Posts by Rod David
Post-open Review… Decision point.
Near-term target immediately met.
Fresh lows were likely to test 2025.00-2027.00, and all interim bounces were likely to fail. Opening at 2033.00-2035.00 reacted up to test 2039.50 resistance, then reversed down. Hard.
The first half hour ended by touching 2025.00. RSIs diverged positively while eking out a couple of lower lows down to 2023.75. Its reaction up tested 2031.00 before dipping back down toward 2025.00. Bouncing again would target 2033.00 and potentially 2035.00.
There’s no requirement to extend down any deeper. But extending down is likely without the the noon hour’s entry at least trying to retest the open’s highs. The next substantial objective of extending down would be in the 2018.00 area.
Pre-market Tour (recording & summary)
The latest bounce off of 2033.00 support reached 2041.00. That has been retraced to test 2035.00, which now is barely even obligatory support. A dip to 2025.00-2027.00 is likely, with interim bounces still likely to fail.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Drifting toward the lows.
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…
Wednesday morning’s probe under its bias-down signal down to 2035.25 was recovered in time to put into play an offsetting test of its bias-up signal. The steep morning rally wreaked of impatient buying. But overly-optimistic buyers triggered the afternoon’s bias-up signal and quickly met its 2057.75 target. But that only left buyers unable to defend against hawkish FOMC Minutes that triggered a 27-point plunge. Its 2033.00 objective was probed to within 1 tick of touching the nearly two-week old 2030.50 low. Its reaction up attacked 2046.00.
Overnight action’s new info…
Wednesday’s late bounce never extended, and soon began retracing back toward Wednesday’s plunge low. Support at 2033.00 has held repeated tests, optimistically avoiding a retest of yesterday’s low.
If, then…
Spotted the pattern? Optimism remains alive, which is potentially bearish from a contrarian perspective. Yesterday’s intraday rally had originated from only a very shallow probe under prior lows. Today’s rally attempts are likely to be more skeptical, so I wouldn’t trust any bounce prior to testing 2025.00-2027.00. While the price pattern doesn’t require bouncing at all, the ongoing optimism may interfere again. Unless the open were to recover positive territory and then extend higher quickly, fresh lows are likely.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2033.00 would be likely to trigger the 2036.00 bias-down signal at 10:15. Exiting the open above 2043.00 would be unlikely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2053.75 | 2050.50 |
| …would target | 2059.25 | 2056.00 |
| Bias-down: under | 2039.25 | 2036.00 |
| …would target | 2033.75 | 2030.50 |
| 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)
Simultaneously oversold RSIs at Wednesday’s 2030.75 low require being retested. More so, that stopped optimistically 1 tick short of touching the two-week old Employment Situation report’s reaction. The final hour’s bounce was likely premature, and the fast-approaching close inhibited new sellers.
Otherwise, Thursday’s open will gap up sharply. That’s the least likely scenario, and it would suggest a major paradigm shift has somehow developed overnight. That wouldn’t effect WedEX’s passively bullish signal. But it triggered by a shallow margin, so Thursday’s open could turn it into a late actively bearish signal by proxy.
Meanwhile, keep in mind what I began describing last week as an opportunistic environment. The growing pool of evidence now includes this morning’s surge, being the second morning surge in three days. All that is missing now is a substantial intraday reversal… Oh, wait. Done.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.