Posts by Rod David
Pre-market Tour (recording & summary)
The overnight drop probed 1 point under what would be the 2041.75 renewed bias-down target. A reaction up came within 1 tick of the 2046.75 bias-down target, and now 2041.75 is being retested as support.
That reaction down has formed a Falling Wedge, and its low is stopping optimistically short of touching the actual low.
Breaking lower from this pattern is likely to be aggressive, targeting the upper-end of the 2035.00-2035.00 objective. Recovering 2044.75 first — which is being tested now — would make the next downleg likely to originate from 2048.00.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Another banana peel slip.
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…
Monday night’s slide had greeted Tuesday’s open back at Friday’s 2060.50 close, rejecting Monday’s interim rally. Probing lower and not exploiting recovery setups then indicated the trend was down, extending to 2048.00. Rallying into and out of the noon hour triggered the afternoon’s 2057.00 bias-up signal. Being only a correction, the rally extended quickly to within 1 tick of its 2063.50 target. Being a correction that had met its target, price fell back to 2052.50. The position-squaring window’s bounce attacked 2059.50.
Overnight action’s new info…
Firming into Asia’s opens had attacked 2060.50, but Tuesday’s late low was soon being probed down to 2051.25. Europe’s opens triggered another attack on 2059.50, but that was soon retraced, and then reversed. Tuesday and Friday’s lows are being probed to 2041.00.
If, then…
There was no bullish reason to revisit Friday’s range. It had already recovered from probing early-April’s consolidation. Its breakout had launched the last rally leg, so retesting it once was done either to launch another rally, or else to break lower. Retesting it twice suggests the latter. Having failed Monday’s bounce from Friday’s testing the prior consolidation’s upper-end as support, a probe under its 2030.00-2035.00 lower-end is the next objective. A significant gap down is indicated, which if not being reversed through the opening 15 minutes, would suggest significant follow-through into the afternoon.
First Trade…
Exiting the open at 9:45 under 2042.75 would be unlikely to recover the 2046.75 bias-down target by 10:15 and renew the bias-down signal. Exiting the open above 2048.75 would be likely to recover the bias-down target through 10:15.
Post-market Wrap (recording & summary)
Closing above 2056.00 Tuesday could have undermined the morning’s break under it. Actually, closing above 2059.50 would have at least negated the downward momentum. Regardless, Tuesday’s close was at 2056.00, not being recovered, certainly not decisively. The retest of early-April’s consolidation is likely to give way.
Potential for another counter-trend bounce can’t be discounted, especially since 2056.00 was still being tested at Tuesday’s close. But unless Wednesday’s open were to gap up sufficiently to invalidate Tuesday’s break — similar to how Monday’s rally was invalidated — then the resolution is likely to be down.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2067.25 | 2061.00 |
| …would target | 2072.25 | 2066.00 |
| Bias-down: under | 2059.00 | 2052.75 |
| …would target | 2053.00 | 2046.75 |
| Signal status: STILL TESTING BIAS-DOWN SIGNAL, 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.
Pre-close View… Speeding it up. And back down.
Corrective bounce fails to extend.
We already know the context of any bounce is a correction. That was dictated by this morning not compartmentalizing its probes under 2059.50. This morning’s 2048.00 low should be broken on the way down to 2030.00-2035.00, and lower.
None of which precludes a corrective bounce.
So, this afternoon’s 2057.00 bias-up signal triggered — a buy signal had triggered already above 2054.50 — and quickly rallied until coming to within 1 tick of its 2063.50 bias-up target. It held, instead of exiting the bias environment any higher to undermine the bearish context established this morning.
In fact, the bias environment is lapsing back at 2056.00, also a critical level. Until that actually breaks lower, the most bullish development possible would be to probe fresh highs above 2063.50 through the 3:10-3:20 timing window.