Posts by Rod David
Post-open Review… Digging out but still dug-in.
Late surge trying to extend the open’s firming.
The open immediately surged through 1978.50, avoiding a test of 1973.75 first. Testing 1973.75 first and then recovering 1978.50 would have accomplished two objectives of a bottom. Post-open selling reflects pessimism, and recovering it casts that pessimism as weak-handed, which is bullish from a contrarian perspective.
Only recovering 1978.50 isn’t necessarily overly-optimistic. But it does keep the burden of proof on buyers to maintain the open’s pace. Otherwise, turnabout is fair-play — post-open optimism can be proved weak-handed, too.
Room for noise has been probed up to 1991.75, but never exceeded through a relevant timing window like 10:15 or 10:30. Now RSIs are deteriorating into the higher high. A reversal signal under 1987.75 is being tested.
Probing any deeper than its first 3 minutes’ low would target 1977.25. Any lower than that would target new session lows. Exiting the bias environment above 1991.75 would a big step toward extending the bounce through late afternoon.
Pre-market Tour (recording & summary)
Lower lows to 1972.25 overlapped the 1973.75 potential. Its brief retest to 1971.25 was quickly recovered up to 1978.50. These are the open’s relevant price points…
Testing only 1973.75 before recovering above 1978.50 could be rewarded by extending higher another 20 points to 1998.00. Bouncing from a test of 1972.25 would be likely to fail, and simply extending under 1971.25 would target 1965.25… if not also much, much lower.
Be careful. Be cautious. Be skeptical. And be prepared.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… That’s gonna leave a mark.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o New! Omnistream
o backup (launched AFTER the tour)
(pre-open Market Tour begins at 8:55 ET)
* backup is launched AFTER the Tour
Through the prior close…
Opening almost flat Tuesday at 2009.00 was retraced to attack Monday’s late 1994.75 buy signal as support. Bottoming just after noon then began recovering back up to the fresh highs testing 2014.00 as the afternoon range narrowed back to 2009.00.
Overnight action’s new info…
Ranging narrowly just above 2009.00 was shocked by another Yuan devaluation, which triggered a slide under Tuesday’s low to 1986.00. That was well before midnight. Firming back up to 1998.00 was shocked by Europe’s opens, which triggered another slide under Monday’s low to 1975.50. That’s down 36 points from yesterday’s close.
If, then…
Narrowing into yesterday’s close had laid the groundwork for gapping sharply at today’s open. The likely direction was down — not likely enough to short at the close, only likely enough for overnight trending to be credible. The likely direction was down, since buyers had not gained traction for their considerable efforts since Monday’s too-late surge. Narrowing into yesterday’s close also had laid the groundwork for “equilibrium,” which trends convincingly in one direction, and reverses convincingly at least once. But the first reversal becomes unlikely if opening too far from the orbit of Tuesday’s range, which is defined by 1998.00. Meanwhile, the orbit under Monday’s range reaches 1973.75 and 1965.25. Testing and holding either through a relevant timing window would be credible for launching a reversal back up, or at least a substantial effort. Otherwise, breaking under either would more likely lead to doubling the overnight drop intraday.
First Trade…
Exiting the open at 9:45 above 1987.50 would start to suggest at least a bounce to 1998.00. Exiting the open at 9:45 above 1973.75 after touching it would also suggest a bigger bounce underway. Exiting the open under 1984.00 without yet touching 1973.75 would be likely to extend down.
Post-market Wrap (recording & summary)
Ending the day with a whimper has made Wednesday likely to bang. Tuesday’s last half-hour firmed gradually into the 2008.00-2010.00 resistance range, which is equilibrium. Including overnight action, trending in either direction is likely to be reversed once in the opposite direction. Completing that sequence would then become vulnerable to a more durable trend gaining traction.
Wednesday’s open is likely to gap, but not very far away from Tuesday’s range — still within its magnetic attraction to pull price back into and through Tuesday’s range. Gapping much beyond Tuesday’s range could break free of its orbit to simply trend in that direction.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2021.50 | 2012.50 |
| …would target | 2027.00 | 2018.00 |
| Bias-down: under | 2010.50 | 2001.50 |
| …would target | 2005.00 | 1996.00 |
| 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.