Posts by Rod David
Post-open Review… Couldn’t change its spots.
Open’s surge maintains the week’s pattern of failed bounces.
The 2030.50 low had recovered to greet the open at essentially the 2034.75 bias-down target. Post-open action surged to 2046.75. And never extended higher.
Instead, two dips tested the 2041.00 bias-down signal as support. The second test did poorly. Eventually.
Initially, the 2041.00 bias-down signal had held through 10:15 to trigger no-bias. But eventually, the 2041.00 bias-down signal gave way through 10:30. It was too late to trigger, and too late to invoke a grace period. The no-bias was simply invalidated.
Tuesday afternoon’s corrective bounce was retraced entirely Wednesday night’s rally into Thursday’s gap up also fell back to its interim lows. That pattern didn’t require repeating this morning, but it did require issuing a warning in the chaRTroom. And a sell signal triggered on its second attempt.
Now the open and bias-down target are being retested. They are natural support that might produce a bounce. Extending down to the 2030.00 objective has room for noise down to 2027.25.
Pre-market Tour (recording & summary)
This morning’s Employment Situation report was greeted from the decline’s 2039.00-2039.50 lows. Its knee-jerk reaction spiked down to 2033.00, a preliminary level for the open. A bounce to 2037.50 resolved down to within 2 ticks of the decline’s 2030.00 objective.
Now another bounce is attacking 2033.00 as support again. This morning can still trend in either direction. But post-open action should try replicating the pre-open selling to some degree.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Champing at the bit.
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…
Gapping up 14-16 points Thursday would have rejected the ongoing downtrend. Wednesday’s night’s action fully tested that limit up to 2060.00, but greeted Thursday’s open at 2051.00. The morning slid back to unchanged around 2045.00, and the afternoon bias environment began by attacking Wednesday’s 2039.00 low to within 2 ticks. Two bounces testing 2045.00 defined sideways ranging into the close, as Friday’s approaching Employment Situation report inhibited trending.
Overnight action’s new info…
Thursday afternoon’s choppy ranging has essentially persisted, but decline seems eager to get on with it. Bounces still holding tests of the 2045.00 area. But their interim dips have probed momentarily to fresh lows at 2038.00. The latest bounce is being followed by a third drop to 2038.00, yet to recover.
If, then…
The decline has already identified its next objective at 2035.00 or 2030.00. I think the latter more so than the former, if not also lower to a 2027.00 handle. Buyers have ineffectually expended a lot of energy recently. Wednesday afternoon’s bounce had originated from just above 2039.00, where the bounce was retraced. Wednesday night’s bounce (and Thursday’s gap up) expended a lot of energy, too, also ineffectually, as we now know by its complete retracement to fresh lows. The ongoing decline should have little difficulty aggressively exploiting all of that failed buying pressure and chipping away at support, especially with the weekend’s impending illiquidity… If not — if the decline’s overnight eagerness becomes overly-pessimistic — then the likely alternative is a substantial rally.
First Trade…
Exiting the open at 9:45 above 2042.00 would be unlikely to trigger the 2041.00 bias-down signal at 10:15. Exiting the open at 9:45 under 2039.75 would be likely to trigger bias-down. Exiting the open under 2033.00 would be likely to renew the bias-down signal under its 2034.75 bias-down target at 10:15.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2056.75 | 2050.75 |
| …would target | 2062.25 | 2056.25 |
| Bias-down: under | 2047.00 | 2041.00 |
| …would target | 2040.75 | 2034.75 |
| Signal status: NO-BIAS INVALIDATED, TESTED BOTH BIAS-DOWN PARAMETERS | 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)
Had Wednesday night’s rally to 2059.50 been done intraday, then all available buying pressure would have been expended without gaining traction for the effort. Pre-open action was attacking the morning’s 2055.50 bias-up target, and exceeding it post-open could have renewed the bias-up signal. Either of those setups could have marginalized sellers.
Neither of which prevents recovering from lower lows. But both suggest that lower lows are still coming. Gapping up Friday above Thursday’s highs, if not also its pre-open highs — similar to Thursday — could still reject the decline. Otherwise, trending down into and also possibly out of the weekend is likely.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.