Posts by Rod David
Pre-market Tour (recording & summary)
The overnight recovery to 1847.50 reacted down to 1837.25. Surging in reaction to 8:30’s econ report probed a fresh high up to 1848.50, but only momentarily as another reaction down is testing this morning’s 1841.25 bias-up target as support.
Resuming the recovery into the open would be the most reliable among bullish setups at this stage of the pattern. Otherwise, just standing still would suggest that new buyers aren’t being attracted, only adding to impatience ahead of the impending 3-day holiday weekend illiquidity.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Delayed reaction.
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…
Plunging overnight to probe the 1805.00 3-week old lows by 3 points had reversed up partially through Thursday’s open to attack 1834.50 to within 1 point. The balance of the bias environment was spent falling back down toward the lows at 1807.50. A modest (relatively) bounce to 1822.00 was retraced to 1805.00 at the afternoon’s bias environment exit, a virtual air pocket below it. Oil suddenly surged and so the break was reversed up to 1834.50 before the close.
Overnight action’s new info…
Probing slightly higher to 1837.00 was quickly reversed back down to attack 1822.00. Already recovering into Europe’s opens, higher highs have now extended up to 1847.50.
If, then…
Yesterday’s late recovery had initially stopped pessimistically short of touching the morning’s high, which suggested its actual recovery would almost literally explode higher on the way to at least 1850.00. It didn’t, which was more pessimism (potentially bullish from a contrarian perspective) but sellers retained control. Even if the overnight extension were to touch 1850.00, sellers can retain control if post-open action doesn’t still extend higher. Yesterday’s late break lower was victim of the impending weekend illiquidity — 3-day weekend, no less — that makes sponsorship vulnerable. Gapping up is itself always vulnerable, too.
First Trade…
Exiting the open at 9:45 above 1845.50 would be unlikely to reverse back under the 1841.25 bias-up target through 10:15, and likely to renew the bias-up signal next targeting 1850.25. Exiting the open under 1838.00 would be unlikely to exceed the bias-up target long enough to renew the bias-up signal. Exiting the opeen under 1829.25 would be unlikely to trigger the 1834.50 bias-up signal.
Post-market Wrap (recording & summary)
Thursday’s last surge probed the morning’s high, with the road wide open for almost doubling the 27-point surge that had preceded it. But the 1834.50 resistance wielded more influence than anticipated.
And that’s interesting. Because that’s pessimism. Still pessimistic while probing the morning’s high, even after extending the 27-point surge that had stopped pessimistically short of touching the morning’s high.
Sellers remain in control, but that can be negated by gapping up. Absent gapping up, the pattern remains vulnerable to trending back down.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Overnight Globex trading in the chaRTroom here.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1839.75 | 1834.50 |
| …would target | 1846.50 | 1841.25 |
| Bias-down: under | 1827.25 | 1822.00 |
| …would target | 1816.75 | 1811.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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… Fallen and can’t stay down.
Probing fresh lows caught a bid.
Exiting the morning’s bias environment probing fresh post-open lows stopped short of touching the overnight low. Firming through the noon hour and into the bias environment’s entry triggered no-bias.
The afternoon’s no-bias environment began lapsing back at the morning’s low. And then lower. But only momentarily.
Crude Oil headlines triggered a surge. More than a surge, like Godzilla is more than a lizard. A 27-point move in under a half-hour was attacking the morning’s high. And that has been retraced by 15 points.
Stopping short of this morning’s high is pessimistic. Pessimism at the peak of a 27-point surge seems counter-intuitive, and it is. But if the rally were to restart, then new highs are required.
It’s getting a little late to resume the rally, but the position-squaring window is still coming at 3:37. Catching a wind at its back can reach 1850.00 and higher. Resuming the decline is unlikely today.*
*Famous last words.