Posts by Rod David
Pre-market Tour (recording & summary)
Bouncing from the 1909.25 overnight low tested and retested (and re-retested) the 1920.00 area. A reaction down is testing (and retesting) 1911.00 as support — maintaining its break through the open would renew the 1915.50 bias-down target, making the open almost a make-or-break situation.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Giving back, again.
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 Monday held Friday afternoon’s lows to avoid trending down lower than 1912.50. The gap back up to Friday’s 1931.00 close was eventually filled on the way to fresh highs at 1940.00. Reacting down retraced deeply enough not to close above Friday’s 1933.00 high, so its breakout wasn’t confirmed.
Overnight action’s new info…
Monday’s late reaction down extended deeper to test 1924.00. A shallow bounce there resolved down, too, eventually touching 1909.25. Its reaction up is testing 1920.00.
If, then…
Whether a rally is accumulative or distributive depends on its origin, what it probes, and where it closes. Yesterday’s recovery failed to close above resistance that it tested intraday. So, trending up from the morning’s lows was actually distributive. Timing can be revealing, too. This is why not filling the gap back up to Friday’s 1931.00 close until late-Monday would have been vulnerable to reversing down sharply. And it has reversed down sharply, as the 1910.00 high of last week’s range was tested overnight as support. But distribution doesn’t become a downtrend until support is broken through a relevant timing window. That opportunity is presented by the overnight decline. Not recovering above relevant support through the open would be vulnerable to probing into last week’s range down to 1904.50. .
First Trade…
Exiting the open above 1924.00 at 10:15 would be unlikely to trigger the 1921.00 bias-down signal at 10:15. Exiting the open at 9:45 under 1918.50 would be likely to trigger bias-down. Exiting the open under 1911.50 would be unlikely to recover the 1915.50 bias-down target at 10:15, renewing the bias-down signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1944.75 | 1938.00 |
| …would target | 1949.50 | 1943.00 |
| Bias-down: under | 1927.50 | 1921.00 |
| …would target | 1922.25 | 1915.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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)
Not for lack of trying… Friday’s breakout close wasn’t likely to be confirmed after Monday’s open gapped down. Despite not trending down through the morning, a durable rally wasn’t likely to resume. The afternoon did rally, and it did probe Friday’s 1933.00 high up to 1940.00. But the close was overlapping 1933.00 instead of confirming its breakout.
Closing above 1924.00 was repeated, but not confirmed, so 1946.25 isn’t in-play. That doesn’t prevent its test anyway, which would have been likely also to visit 1969.00, just not so much now.
Monday’s 1912.50 low stopped optimistically short of touching last week’s “lower prior highs.” A bounce is still likely from their test, but albeit less likely for the bounce to resume Friday’s breakout.
For gaining traction, Monday afternoon’s buyers are likely to be rewarded with probing fresh highs Tuesday morning. That would be inverted by immediately breaking back under Monday’s 1922.50 prior lows.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… No takers.
Breaking out to the upside again.
The gap back to Friday’s 1931.00 close didn’t require being filled. Filling it after the afternoon’s bias environment exit would a high-risk pattern vulnerable to reversing down sharply — plunging.
Entering the final hour above the bias environment’s high did fill the 1931.00 gap. But the 3:10-3:20 timing window extended to new highs. Extending even higher into the 3:37-3:52 position-squaring window has touched 1940.00.
It’s the same pattern, still vulnerable to plunging if a sell signal is triggered. Otherwise, closing above Friday’s 1933.00 high would confirm Friday’s breakout. More so, having probed above Friday’s high, closing under 1924.00 would invalidate the breakout.