Posts by Rod David
Post-open Review… Optimism is pegged.
Shallow post-open dip, rushed recovery, target met.
If not gapping up, then this morning’s only bullish scenario would first reject a probe under yesterday’s low. Then the 2039.50 bias-down signal must avoid triggering, putting into plan 
an offsetting test of the 2050.50 bias-up signal.
Yesterday’s low was pierced by an optimistic 2-tick margin. A buy signal triggered above 2041.50. And the bias-up signal was tested up to 2052.00.
No-bias triggered at 10:15. It was almost invalidated by probing above it. But probing above it was retraced through 10:30. This is a no-bias environment, so its upper-end should be defined by its bias-up signal if tested.
A reaction down was likely to test 2046.00 (now being probed down to 2044.50). Overbought RSIs at the 2052.00 high require its retest, probably by a couple of ticks. But, what then?
Even this morning’s most bullish scenario was likely to resolve down. Probing under yesterday’s lows was no deeper than necessary to qualify. That’s optimism, like the steep recovery resembling impatient buying, which can be bearish from a contrarian perspective. And the bounce’s target has been met and held.
Having dipped to 2044.50, back above 2047.50 would signal that a retest of the overbought RSIs is underway. Rallying any higher would be difficult with the afternoon’s FOMC Minutes release looming. Regardless, notice that substantial intraday trending range is now coming earlier in the day — we’re obviously back in a very opportunistic environment.
Pre-market Tour (recording & summary)
The choppy overnight range finally began breaking lower. Trending down for 90 minutes from its last touch of 2045.00 has just attacked 2035.00 to within 1 tick. This area is natural support, and the greater it is defended by buyers, the less buying pressure will be available to avoid triggering 2039.50 at 10:15. The only other bullish path for the morning could be to bounce sharply from testing the bias-down signal.
At the end of this morning’s pre-market Tour recording, I include observations of how the market may develop around the post-open reports: EIA Crude Oil at 10:30, and FOMC Minutes at 2:00.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Eerily quiet on the Western front.
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…
Perhaps traction gained during Monday’s rally to 2068.50 was useful Tuesday in one sense — gapping open at 2057.00 exited the morning’s bias environment at 2057.00. But the afternoon bias environment’s entry found an air pocket under the morning’s 2052.50 low. A one-hour, 17-point slide exited the bias environment testing and retesting 2037.00-2038.00. The balance of the session ranged sideways back to 2045.00.
Overnight action’s new info…
Relatively narrow choppiness has remained within yesterday’s late range. Only briefly piercing above 2045.00, reactions down have only attacked Tuesday’s late lows.
If, then…
It’s important to note that overnight action following Friday afternoon’s 20-point slide had also ranged choppily ahead of the next open. That open greeted Monday at the same levels, then surged and extended through the morning and afternoon. Similar setups appearing consecutively tend not to resolve similarly. And the market is running out of bullish excuses to dismiss revisiting the prior Friday’s range. Gapping up above 2048.00 and extending through 2050.50 could marginalize sellers again. Otherwise, a morning rally would be unlikely without first rejecting a probe of fresh lows.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2037.25 would be likely to trigger the 2039.50 bias-down signal at 10:15. Exiting the open above 2046.50would be unlikely to trigger bias-down.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2054.50 | 2050.50 |
| …would target | 2060.00 | 2056.00 |
| Bias-down: under | 2043.50 | 2039.50 |
| …would target | 2037.00 | 2033.00 |
| Signal status:NO-BIAS, TESTED BIAS-DOWN 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)
If there’s anything bullish about Tuesday’s decline, it’s the afternoon air pocket from 2055.00 to 2038.00. Suddenly starting a one-hour slide of 17 points doesn’t happen without expending a lot of selling pressure. Air pockets form from a sudden influx of sponsorship, not from the absence of counter-trend opposition.
That’s not the bullish part.
Finally stalling at 2 ticks under Friday afternoon’s 2038.50 low, a bounce resolved down to a fresh low at 2036.75. RSIs diverged positively, enabling a bounce up to 2045.00.
That’s not the bullish part, either.
Actually, there is nothing bullish about Tuesday afternoon’s air pocket slide. Not, yet. But having expended so much selling pressure without gaining traction for the effort, the leg is vulnerable to rejection. Gapping up Wednesday to and/or through its 2055.00 origin would be bullish, targeting fresh highs for the week above 2070.00-2071.00.
Back above 2048.00 and 2050.50 overnight would help to position the open for gapping up sufficiently. Otherwise, fresh lows would target 2033.00 and 2027.00 before the next chance to reject the decline.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.