Posts by Rod David
Pre-market Tour (recording & summary)
Be sure to watch the recording if you didn’t attend the pre-market Tour. We reviewed the influences from yesterday’s price action, describing how some have resolved (no-bias trending, downside target met) and some have evolved (Symmetrical Triangle’s potential false break reversal, “session-long rally” setup). The remaining templates have limited likely outcomes, so this should quickly become a highly-predictable pattern — and none of those likely outcomes is not to simply range narrowly.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Recovering yesterday.
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…
After Tuesday’s session-long rally to attack its 2080.50 target, Wednesday’s gap down to 2074.25 didn’t signal strong-handed selling pressure. But not immediately rallying did keep the door open to extending the overnight pullback. And that’s what happened after a momentary surge to 2087.50 with Crude Oil. The morning probed overnight lows down to 2069.00 and the afternoon resumed the decline to within 1 tick of 2059.50. It was an “inside day,” but sellers gained traction.
Overnight action’s new info…
The drop’s next two targets had been 2059.50 and 2058.00, and the latter was quickly pierced by 2 ticks. Its reaction up to 2062.00 was retraced entirely. The next bounce to 2064.00 was retraced almost entirely, too. The next bounce has extended up to 2071.50.
If, then…
Yesterday’s post-market Wrap described several bullish influences operating on yesterday’s decline — such as it being an inside day, extended by a Symmetrical Triangle, and the afternoon’s drop being “no-bias trending.” The only bearish influence was the afternoon’s sellers gaining traction. Sellers’ traction can be inverted by rejecting the afternoon’s decline from the bias environment’s 2069.50 high. Since yesterday ended by trending down, the same rejection would also form a “session-long rally” setup. The overnight rally is in position, so failing to exploit the opportunity would be as bearish as the missed opportunity would have been bullish. And it’s pretty bullish, both targeting Tuesday’s high and then also likely resuming the rally.
First Trade…
Exiting the open at 9:45 above 2071.00 would be likely to trigger the 2067.50 bias-up signal at 10:15. Exiting the open above 2077.75 would be likely also to exceed the 2074.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2066.00 would be unlikely to trigger the 2067.50 bias-up signal.
Post-market Wrap (recording & summary)
The morning bias environment’s probes beyond either end of the opening range were unusual volatility. Wednesday’s session had many influences left outstanding, which will be important to know about going into Thursday’s session. Among those that I described during the post-market Tour are:
- Morning’s fresh low was neither rejected nor extended.
- Symmetrical Triangle may have launched a false break.
- Afternoon drop was “no-bias trending” that requires recover.
- Inside day suggests sponsorship was weak-handed sellers.
- Yet the decline gained traction by its afternoon timing windows.
Almost any further downside would target a retest of Friday’s lows. Resuming the rally would likely start by gapping up sharply. Levels and objectives are discussed on the recording, and we’ll delve deeper into the likelier setups before Thursday’s open.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2072.50 | 2067.50 |
| …would target | 2078.75 | 2074.00 |
| Bias-down: under | 2062.75 | 2058.00 |
| …would target | 2057.50 | 2052.50 |
| 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.
Pre-close View… Down to the last pop.
No-bias trending has reached a pivotal point.
After retracing the post-open surge back down to the overnight lows, a Symmetrical Triangle formed between 2069.00-2073.00. It developed through the noon hour before finally breaking lower.
No-bias triggered, but that didn’t prevent “no-bias trending” from extending down. A retracement should touch this afternoon’s 2067.50 bias-down signal, and often also the 1:20 2070.00 print.
Meanwhile, the drop is testing yesterday’s 2062.25 opening low down to 2061.25. This is still an inside day, reacting off of an extreme. Its downward bias tends to be bullish from a contrarian perspective.
Also, Symmetrical Triangle patterns tends initially to break falsely in one direction before reversing more substantially in the opposite direction. If this afternoon’s break is false, and done, then its reaction would target 2083.50 and 2087.25.
Sellers did gain traction for their efforts — the bias environment was exited under the noon hour’s low, and the final hour was entered lower. But back above 2064.00 (being tested now) is capable of triggering the Symmetrical Triangle’s reversal. Otherwise, support at 2059.50 and 2058.00 could be last defenses against probing last Friday’s lows.