Posts by Rod David
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2656.75 | 2661.00 |
| …would target | 2666.75 | 2671.00 |
| Bias-down: under | 2646.75 | 2651.25 |
| …would target | 2637.50 | 2642.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Late dissent.
Bias-up eventually triggers, ultimately fails.
A struggle of wide swings triggered bias-up. A late drop invalidated it.
The overnight low’s dip back down to this morning’s 2651.25 bias-down signal had recovered pre-open to test the 2665.25 bias-up signal. Quickly surging up to 2673.00 was reversed back down to 2657.00. Another more substantial surge triggered bias-up signal, and attacked its 2676.75 bias-up target to within 2 points.
But reacting down retraced the bias-up signal through 10:30 — barely, but in time to invalidate that it had triggered. It’s not required to be the window’s upper-end. Its bias-up target isn’t required to be met. And an offsetting test of its bias-down signal isn’t in-play.
In fact, despite invalidating the bias-up, another rally leg is free to begin, and would likely be very productive. Meanwhile, fresh post-open lows are attacking 2655.00. Its break would suggest reinforcements had arrived, if only to retest yesterday’s lows.
The First Trade & Pre-open Tour Recording… Back to yesterday’s lows.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
The last session for the Dec contract as front-month was greeted optimistically, attacking the prior session’s highs. The renewed bias-up target was already being probed. Trending choppily but surely higher through the morning extended to within 3 ticks of the next likely target at 2687.00 (basis Dec, 2691.00 basis Mar). I had already warned that its test would push back on even the most bullish template, and the balance of the session tumbled. The likely pullback targets were the opening gap’s 38.2% and 61.8% proxies. The first gap-fill proxy at 2658.25/2662.25 was met in time to produce a 10-point bounce, which completed in time to collapse through the close, fulfilling the other gap-fill proxy at 2650.50/2654.50.
Overnight action’s new info…
The next lower target was met at the cash session close, and then probed by 4 points. Bouncing into midnight recovered to attack 2666.00/2670.00. Another surge greeted Europe’s opens at 2671.00/2675.00, where Wednesday’s late bounce had peaked. This peaked, too, trending back down since then to attack yesterday’s post-close lows down to 2647.50/2651.25.
If, then… (notes to accompany the Tour recording)
Wednesday afternoon’s 2681.00/2685.00 bias-up signal doesn’t require being retested, but would be a strong attraction to another upleg. Last night’s failed bounce could have become that upleg, and now a retest of its peak could become that upleg. Regardless, any new upleg would have potential to resume the rally, especially so long as yesterday’s late lows hold any test through the open. Breaking lower would not necessarily produce a straight shot down, but its next major lower attraction would be 2624.00, for which there isn’t much bullish reason to revisit.
NOTE: Coverage rolls forward at the open to the Mar (H) 2019 contract, which trades at a 4-point premium to Dec (Z) 2018.
First Trade…
[Click here to view the Bias parameters] BASIS MAR: Exiting the open at 9:45 above 2654.50 would be unlikely to trigger the 2651.25 bias-down signal at 10:15.
Morning Bias – BASIS MAR
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2260.75 | 2665.25 |
| …would target | 2672.50 | 2676.75 |
| Bias-down: under | 2647.00 | 2651.25 |
| …would target | 2639.25 | 2643.25 |
| Signal status: BIAS-UP | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Extending the rally to its next higher objective at 2687.00 Wednesday would largely depend upon unbridled optimism. This was in contrast to the prior session, whose unbridled optimism only inhibited buyers from reinforcing the move, and attracted counter-trend sellers. Attacking the 2678.00 prior high to within 3 points was retraced to 2661.50 support, and then recovered to trend — more like trudge — higher. The 2687.00 target was met to within 3 ticks and its attraction was neutralized.
Breaking back under the 2681.00 bias-up signal during the bias-up environment extended down to its 2658.25 likely target as the bias environment began lapsing. Finally breaking lower as the proxy window lapsed extended down to the next lower potential target at 2650.50. None of which would have been likely had the bias-up target not been neutralized first. Still, retracing 2681.00 is likelier than not.
The rally’s next objectives would be 2702.50 and 2725.25. Dipping deeper overnight probably must recover before the open for the rally to extend higher. Otherwise, while not necessarily a striaght shot down, the next lower attraction at 2620.00 probably shouldn’t be revisited unless the intent were to resume the decline.
NOTE: Coverage will roll forward at Thursday’s open to the Mar (H) 2019 contract, which trades at a 4-point premium to Dec (Z) 2018.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.