Posts by Rod David
Post-open Review… Two much, two soon.
Two aggressive rally legs met by big selling.
Similar to the overnight 12-point rally that had reacted down 9 points, a post-open 10-point surge was retraced, too. And then some. Almost 3 points under its origin.
Gapping up above 2086.00 was likely to extend through 2088.00 and resume the rally. The 2091.75 bias-up target was soon exceeded on the way to 2097.25.
Being within the renewed bias-up target area, a lot of buying pressure was satisfied. But its reaction down slid all the way to the 2091.75 bias-up target. And then its support cratered by plunging down to 2084.25.
The 2086.00 bias-up signal was overlapped at 10:15 to invoke the grace period. It was recovered through 10:30 to trigger late. Its target and renewed target have been met, so resuming the rally isn’t required. But sellers did not regain control.
I’m still giving every benefit of the doubt to resuming the rally. The balance of this morning might become a little choppier and less trending. But overbought RSIs at the 2097.25 high require an eventual retest. Meanwhile, the burden of proof is still on sellers.
Pre-market Tour (recording & summary)
The overnight rally to 2092.75 had been retraced to 2083.50, a constructive 61.8%. Surging from there to 2090.00 confirmed a relevant level had been met, if not also that a relevant leg had been added to the structure. Now the open is being greeted by another dip, this one testing 2086.00-2088.00 as support. Holding its test through the open would make the overnight rally likely to resume this morning. Not holding 2086.00-2088.00 would make a deeper correction likely, instead.
Details and other markets coverage are discussed in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/fbkmrch
The First Trade… Another overnight warning shot.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Sunday night’s rally to 2095.00 had suggested the rally was ready to resume. But a pre-open dive fell to 2083.25 through Monday’s open. And that extended down to 2080.25 through the morning. An afternoon rally stopped 1 tick short of retaking control above 2088.00, and the balance of the afternoon reacted down to test its 2079.00 objective.
Overnight action’s new info…
Actually, the 2079.00 objective was met before Monday’s last half-hour began. That left ample opportunity to extend down. Not exploiting it had made an overnight rally likely to attack Monday afternoon’s 2086.00-2088.00 highs. In fact, they were being probed into and out of the Globex open, extending to attack 2093.00. Too much, too soon, as that was retraced by 61.8% down to 2083.50. Its recovery up to 2090.00 is now dipping back into the 2086.00-2088.00 range as support.
If, then…
Reversing down overnight doesn’t change the rally’s signal for resuming, which is to open to and/or through 2086.00-2088.00. In fact, the overnight rally’s 61.8% retracement down to 2083.50 is constructive. And the overnight pessimism is potentially bullish from a contrarian perspective, following two consecutive overnight rallies that evaporated at the open. All of which the open must exploit immediately, or else find another window remains open to attacking last week’s lows.
First Trade…
Exiting the open at 9:45 above 2088.00 would be likely to trigger the 2086.00 bias-up signal at 10:15. Exiting the open under 2084.50 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2087.25 | 2086.00 |
| …would target | 2083.00 | 2091.75 |
| Bias-down: under | 2080.25 | 2079.00 |
| …would target | 2073.75 | 2072.50 |
| Signal status: LATE 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.
Post-market Wrap (recording & summary)
Monday afternoon bounce to its 2088.00 resistance had expended as much buying pressure as was possible without gaining traction for the effort. Entering the final hour any higher would have resumed the rally, but 2088.00 pushed back to make 2079.00 likely.
Starting that downleg from so high and so late made it difficult to continue attracting new sellers at 2079.00 so near the close. So the last half-hour bounced from 2079.00.
Rallying was likely to resume Monday. If not at the open, then through the close. And if not through the close, then by proxy of gapping up at Tuesday’s open. Monday’s late bounce still had time to extend above 2084.50 but didn’t. Its reaction down did hold 1079.00. Gapping up Tuesday to and through 2086.00-2088.00 is very likely if the rally has resumed anyway.
Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/wzjhyfh
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