Posts by Rod David
Post-open Review… Sliding out of home.
Late dip extends well toward bias-down target.
The 1882.25 open dipped to 1879.00 but recovered the dip fully at 9:45. The burden of proof was on sellers, they tried, and they failed. That would be bullish if buyers had exploited it by reversing above the open, but they did not.
And sellers exploited that. Another dip fell to 1875.50. Reacting up to probed its bounce limit higher than its first 3 minutes. Not by much, not for long, and not without continually overlapping it. All of which sellers exploited by dipping again to 1872.50.
Late breaks reflect weak-handed sponsorship. They don’t prevent extending down, but that typically ends aggressively back to the upside. Coming within 3 ticks of the 1871.50 bias-down target instead of just 4 would have helped to suggest that sellers are done.
Nevertheless, back above the 1878.50 bias-down signal at 10:30 or 11:30 would trap shorts. Otherwise, the 1871.50 bias-down target remains in-play.
Pre-market Tour (recording & summary)
The overnight slide had extended down to 1876.50 before surging pre-open to attack 1884.00. Another 2-3 points higher could marginalize sellers for the day while targeting fresh highs well above 1900.00. But resuming the overnight slide could also resume the retracement of Sunday night’s gains, perhaps back down under Friday’s 1960.00 highs.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Still ticking.
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…
Recall that Friday’s gap up had reacted down to test Thursday’s “lower prior highs” down to 1834.00. Its test held, and the balance of the session trended up relentlessly to test 1860.00.
Overnight action’s new info…
Sunday night’s open gapped up 5 points and had extended to 1890.00 by Monday morning. Its reaction down to 1880.00 was recovered up to 1885.00 at the noon hour Globex close. Monday night’s open rallied again, probing fresh highs up to 1892.75. That, too, reacted down — testing Monday’s reaction lows down to 1878.00, and up to 1885.00.
If, then…
Friday’s buyers had gained traction for their efforts. Sunday night and Monday night’s highs could easily qualify as their reward. But will it hold this morning, let alone extend higher? Holiday trading isn’t often duplicated on its second day, and Friday’s pre-holiday trending is often counter-trend. Nevertheless, not rejecting the interim rally would make higher highs likely, up to 1907.00 and 1920.00 before a new downleg would be credible.
First Trade…
Bias Parameters have been updated from those published at Friday’s close. Exiting the open at 9:45 above 1883.00 would be unlikely to trigger the 1878.50 bias-down signal at 10:15. Exiting the open under 1875.50 would be likely to trigger bias-down. Exiting the open above 1889.25 would be likely to trigger the 1885.00 bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1889.25 | 1885.00 |
| …would target | 1896.25 | 1892.00 |
| Bias-down: under | 1882.75 | 1878.50 |
| …would target | 1875.75 | 1871.50 |
| Signal status: BIAS-DOWN | 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.
Globex link to the chaRTroom
The Sunday night crew didn’t mind US markets being closed. They may even prefer it, especially after extending Friday’s rally significantly higher.
Recall that Friday’s gap up and test of Thursday’s “lower prior highs” down to 1834.00 had held, and the balance of the session had trended up relentlessly to test 1860.00. Sunday night’s open gapped up 5 points and extended to 1890.00 at Monday’s noon hour Globex close.
Are 1907.00 and 1920.00 next? Holiday trading isn’t often duplicated on its second day. But not rejecting this interim rally would make those higher highs likely.
chaRTroom will re-open to monitor Globex trading at 6:00pm ET here.