Posts by Rod David
Post-open review… Head-fake it until sellers make it.
Opening decline is setting today”s tone.
After recovering almost 20 points to attack the 1939.00 overnight high before the open, a last-minute blip-up pierced 1941.00 by 3 ticks.
Recovering 1941.00 would have rejected the head-fake template discussed in The First Trade blog post and during the pre-market Tour. Similarly, reacting down immediately back under 1938.00 confirmed it.
Back under 1938.00 and 1934.00, to 1927.00. And after consolidating back to 1934.00, that”s breaking lower to test 1918.00.
The head-fake template hasn”t completely rejected the overnight rally, but that”s its objective. Meanwhile, this morning is still bias-up. In fact, its bias-up signal is renewed, for having exceeded the 1922.75 bias-up target through 10:15. But all renewed targets have been met already.
There consolidation resisted by 1934.00 had some instances of “ineffectual optimism.” Now there”s more, bouncing off of 1918.00 after barely touching yesterday”s post-close surge. Yesterday”s cash session close equated to 1907.75 and RSIs were oversold simultaneously at the 1898.75 low to require its retest. That”s the least of it, so long as the bias environment isn”t exited in rally mode.
Reacting down from the 1939
Reacting down from the 1939 overnight high to range around 1925 was already vulnerable to attracting another round of sellers at the open. Now, more so, the overnight high has been attacked again, much nearer the open. Failing to hold 1934 would suggest the head-fake template was developing. Recovering 1941 would suggest the overnight rally is extending intraday. Details and other markets coverage are in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/fbkypjx
The First Trade.,, Another hope spring?
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…
Monday night”s plunge didn”t extend down immediately. Rather, Tuesday morning formed a Symmetrical Triangle that narrowed between 1921.00-1940.00 to its 1231.00 apex at noon That broke lower into an Expanding Triangle between 1913.00-1927.00 that broke lower into the final hour. Its plunge to 1898.00 was recovered as quickly back into the afternoon”s triangle.
Overnight action”s new info…
Firming back to 1921.00 then accelerated to 1934.00 in reaction to BOJ intervention. Improving later to 1939.00 proved temporary, eventually reacting down to test 1921.00.
If, then…
We haven”t seen an overnight head-fake in awhile. That”s trending in one direction overnight which reverses into quite a different tone through the morning. The reversal tends to be abrupt at the open, but avoiding a head-fake by resuming the overnight trend need not be very obvious immediately. This being Wednesday before a three-day weekend, trending to new extremes should be obvious early, or else new extremes become unlikely. So, sell signals will get a bigger benefit of the doubt than buy signals.
First Trade…
Exiting the open at 9:45 above 1925.00 would be likely also to exceed the 1922.75 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1911.00 would be unlikely to trigger the 1915.25 bias-up signal at 10:15.
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1918.50 | 1915.25 |
| …would target | 1926.00 | 1922.75 |
| Bias-down: under | 1910.25 | 1907.00 |
| …would target | 1904.50 | 1901.25 |
| Signal status: BIAS-UP, BIAS-UP 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.
Tuesday”s break from its 1913-1919
Tuesday”s break from its 1913-1919 range finally began after the 3:10-3:20 timing window had lapsed. That was too late to be sponsored by strong hands, but it was plenty productive, touching 1989.75 at its low. The drop”s productivity was the product of its timing, and not of its weak-handed sponsorship that was retraced entirely into the 1913-1919 range.
Late, weak-handed selling pressure, fulfilling its targets, not closing under a level that might put into play lower targets. And all after breaking from the morning”s Symmetrical Triangle, a pattern that tends initially to break falsely in one direction before reversing more substantially in the opposite direction. A rally would be credible.
So long as oversold RSIs at Tuesday”s late 1898.75 low, attracting price down first, doesn”t get carried away. Being Wednesday ahead of a three-day weekend makes extending the decline likely to be obvious now, or else avoid it until next week… Details and other markets coverage were discussed during the post-market Tour, recording linked here:
https://roddavid10.mitel-nhwc.com/join/shwtypz
After 6:30 ET, use one of the following links to monitor the overnight Globex action:
Win XP-Friendly — http://anymeeting.com/127-847-235
non-xp friendly — https://roddavid10.mitel-nhwc.com/join/bfyytsh