Posts by Rod David
Post-open Review… The correction cookie crumbles.
Bias-up target met, Bias-up signal rejected.
Gapping up above at least 2057.00 would have begun rejecting the downtrend, but the open was at only 2051.00. An aggressive post-open surge would have kept alive the rejection potential, but it dipped to test yesterday afternoon’s 2048.00 “lower prior highs.”
None of which qualified as resuming the decline’s momentum. Only as not exploiting the opportunity to invalidate the decline altogether. So, bouncing anyway would be considered only temporary backing-and-filling, refueling sellers.
The 2049.75 bias-up signal triggered, and its 2055.50 bias-up target was met to within 3 ticks. Quickly. So quickly, that there was time for violating a bounce limit, triggering a sell signal, and retracing the bias-up signal through 10:30 back down to 2048.00.
So, this morning’s bias environment is Bias-up Rejected. There is no unfinished business above. There is also no requirement to trend down — while the burden of proof is on buyers, the downtrend remains intact.
2048.00‘s retest was not bullish. Breaking back under it would target 2046.00 and 2042.00. So long as 2048.00 support isn’t broken, the balance of the morning could back-and-fill again.
Pre-market Tour (recording & summary)
The last overnight surge testing 2059.50 had been retraced to its 2051.50 origin. Bouncing to 2055.00 — which is this morning’s bias-up target — has reacted down even lower to 2050.00.
The bullish scenario requires recovering at least the lower-end of 2057.00-2059.50 with little or no delay. So, the bullish scenario is likely to surge out of the open, if not already surging into it. Any less aggressive firming would be suspicious.
The bearish scenario should reverse back under 2048.00, but not necessarily immediately. The range in between is not predictive.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Another recovery?
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 down Wednesday to fresh lows testing 2042.00 was quickly retraced 11 points up to 2053.25, and was still 4 points below Tuesday’s close. Trending back down found fresh lows at 2039.00 during the afternoon bias environment. Choppy, flat-to-higher ranging retraced it to attack 2048.00, overlapping Friday’s lows into the close.
Overnight action’s new info…
The Globex session immediately began contrasting itself to Wednesday afternoon’s choppy, flat-to-higher ranging. Trending up through 2048.00 extended to attack 2057.00 ahead of Europe’s opens. A reaction down to 2051.50 was recovered by a surge up to 2060.00. The surge’s complete retracement down to 2051.00 is trying to recover, now testing 2055.00.
If, then…
Tuesday’s break putting into play 2030.00-2035.00 was not invalidated, but it wasn’t very productive. Hold-short was narrowly avoided as there remained vulnerability to a bigger bounce overnight. But actually reversing the trend would require gapping up to and through 2057.00-2059.50. In fact, the overnight high fully tested this resistance. Its reaction down to 2051.00 is both steep and deep, but it has plenty of time to recover. Regardless of gapping up and regardless of the overnight highs, not triggering bias-up would maintain the ongoing downtrend.
First Trade…
Exiting the open at 9:45 above 2052.50 would be likely to trigger the 2049.75 bias-up signal at 10:15. Exiting the open above 2057.00 would be likely also to exceed the 2055.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2048.00 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2056.00 | 2049.75 |
| …would target | 2061.75 | 2055.50 |
| Bias-down: under | 2048.75 | 2042.50 |
| …would target | 2041.75 | 2035.50 |
| Signal status: BIAS-UP REJECTED | 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)
The morning’s choppiness didn’t resolve in the decline’s resumption. But neither did it resolve in the decline’s retracement. It just resolved in more choppiness.
That choppiness wasn’t without form, that being an inverted Head & Shoulders. Three of them actually, which doesn’t make any one of them any likelier to reverse the trend back up. But a blip-up held resistance at the noon hour’s 2047.75 high before reversing back into the range.
The late reversal didn’t extend back under a prior low which would have merited a hold-short. But the afternoon’s Head & Shoulders created a pivotal support trendline around 2043.00 whose break could resume the decline overnight. Otherwise, reversing the trend up requires immediately recovering 2057.50, and any shallower strength remains likely to resolve down.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.