Posts by Rod David
Post-open Review… Catching up.
Post-open rally attacking overnight highs.
Not just last night’s 2091.25 high was attacked. So was Sunday night’s 2091.50 gap up. All within 3 ticks of this morning’s 2091.75 bias-up target, which is a lot of resistance.
Even if we knew with 100% degree of certainty it would be exceeded, nothing prohibits an obligatory reaction down. In fact, a 4-1/2 point dip is attacking the 2086.00 bias-up signal to within 3 ticks.
Regardless, the burden of proof will be on sellers to retake control. Exiting the bias environment back under its 2086.00 bias-up signal would be a start. Actually, back under 2086.00 through 10:30 would invalidate 10:15’s signal already.
Otherwise, absorbing this reaction down would be likely to extend higher today, next targeting 2110.00.
Pre-market Tour (recording & summary)
The overnight surge attacking the 2091.75 bias-up target had reacted down to 2085.00. Bounces from there have been shallower and shallower, indicating an open AT the 2096.00 bias-up signal. Gapping up is only half the battle to resuming yesterday afternoon’s rally. The gap up must also be maintained, and preferably extended. The alternative could be to probe yesterday’s lows this morning, and lower.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Giving it a shot.
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…
Sunday night’s gap up immediately fulfilled the 2091.00 “unfinished business” left outstanding from Friday. Trending down into and out of Monday’s open extended to fresh lows through the morning. Reacting up from a blip-down to the 2071.50 bias-down target launched the afternoon’s recovery, eventually probing fresh session highs up to 2082.00-2083.50. No traction was gained in the session’s “ineffectual pessimism,” and no unfinished business was left outstanding.
Overnight action’s new info…
Creeping higher… Narrow ranging initially maintained Monday’s late 5-point surge. Another sudden surge 5-point attacked 2088.00, but it was soon retraced down to 2081.75. Firming into Europe’s opens soon surged to a fresh high testing 2091.00. Now its reaction down is trying to hold 2085.00.
If, then…
Monday was the third consecutive session since Wednesday’s high to probe under the prior day’s low, with lower highs. Despite the multi-session trend, Monday’s close recovered back above the two prior sessions’ lows. Will the slowing momentum be exploited today? No traction was gained yesterday, so resuming yesterday afternoon’s rally this morning requires gapping up — which is currently indicated. The gap up must also be maintained through the open and preferably also extended. Regardless, the alternative to rallying this morning would be to resume the downtrend from last Wednesday’s high… Afternoon volatility may be inhibited by high-profile earnings due after today’s close from AAPL, EBAY and (to a lesser degree) CMG.
First Trade…
Exiting the open at 9:45 under 2083.50 would be unlikely to trigger the 2086.00 bias-up signal at 10:15. Exiting the open above 2088.00 would be likely to trigger bias-up. Exiting the open above 2093.50 would be likely to renew the bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2092.25 | 2086.00 |
| …would target | 2098.00 | 2091.75 |
| Bias-down: under | 2083.00 | 2076.75 |
| …would target | 2078.25 | 2072.00 |
| Signal status: BIAS-UP INVALIDATED | 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 vulnerability to fresh session highs never materialized. At least, not in time to be reliable enough for a hold-long. Monday’s last-minute surge offered a glimpse of the seemingly relentless surge, albeit only to probe above the morning’s 2080.50 high.
Delaying the recovery has created “ineffectual pessimism” from Monday’s session. Gapping down, probing fresh lows, and spending the entire session in negative territory is pessimism. Not closing under a prior low is ineffectual. The upside vulnerability remains alive, now by the proxy of gapping up Tuesday — i.e. trending up overnight.
Monday afternoon’s rally didn’t gain traction, so resuming the rally Tuesday — the rally that had peaked last Wednesday — requires gapping up. Any further delay to resuming the rally should extend the decline, the decline that began last Wednesday.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.