Posts by Rod David
Post-open review… Almost a dry cleaners morning.
Rally out of overnight weakness is limited.
Overnight lows had held multiple touches of this morning”s 2073.75 bias-down signal. Pre-open firming was probing back above 2077. Post-open action rallied up to 2081.50, where a consolidation eventually broke higher to 2084.50.
That was just 3 ticks short of the overnight high, and it was a 61.8% retracement back to yesterday afternoon”s highs. Its resistance triggered a dip back down to 2080.50.
This opening action should serve generally as a template for the balance of the morning — perhaps even into the afternoon”s bias environment. In other words, sellers don”t retake control, but the upside is choppy and reluctant to extend very far before reacting down.
Assuming that scenario plays out, then late-afternoon would be postured to resume the rally in earnest, with no limitations. But dipping back down to 2077.00 this morning would suggest a growing vulnerability to trending back down this afternoon.
2074 was thoroughly tested as
2074 was thoroughly tested as support, and now its biggest reaction back up is underway, probing above 2077. There”s no assurance on Fridays for trending at all, but recovering 2077 through the open or not would at least start to suggest a preliminary bias. More details and other markets coverage were discussed during the pre-market Tour recorded here:
https://roddavid10.mitel-nhwc.com/join/cxsttxx
The First Trade… Holding the range.
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…
Trading overnight 8 points above Wednesday”s high to 2093.00 didn”t qualify as rewarding its intraday recovery for having gained traction. Dipping no lower than 2073.00 during Thursday”s open, and then only ranging sideways through the morning”s bias environment, only delayed the actual reward until Thursday afternoon”s bias environment. That was shallower to only 2089.00, and exiting the bias environment slid immediately to within 1 tick of 2077.00. The afternoon”s 2091.00 bias-up target became “unfinished business above.”
Overnight action”s new info…
Firming through the night repeatedly held tests of 2082.00, but extended higher to test 2085.00 after Europe”s opens. That only stretched the rubber band, which snapped back down under Thursday”s last-minute low. The probe has since extended down to 2074.00.
If, then…
A “session-long rally” setup is off the table since today”s open isn”t yet indicated to gap up. So, rallying anyway would be likely to reverse back down before the close. The most bullish scenario may be a rally effort limited until late-afternoon to 2091.00 — resembling a lot of flat-to-higher choppiness — and then breaking higher. None of which would be relevant if the open isn”t holding tests of support. I”m not aware of any scheduled high-profile events this weekend that might be anticipated as catalysts for widespread defensive selling.
First Trade…
Exiting the open at 9:45 above 2077.00 would be unlikely to trigger the 2073.75 bias-down signal at 10:15. Exiting the open under 2073.00 would be likely to trigger bias-down. Exiting the open above 2089.00 would be likely to trigger the 2087.25 bias-up signal.
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2092.00 | 2087.25 |
| …would target | 2096.50 | 2091.75 |
| Bias-down: under | 2078.50 | 2073.75 |
| …would target | 2072.25 | 2067.50 |
| Signal status: NO-BIAS | 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.
Thursday rewarded Wednesday”s recovery as
Thursday rewarded Wednesday”s recovery as little as possible. Not only by delaying the probe above Wednesday”s ~2085 highs until Thursday afternoon, but also by producing only two clean legs above 2085. And they were pretty small legs, barely attacking 2089.
That shallow reward isn”t so much pessimism as it is restrained optimism. Pessimism describes the final hour”s 11-point plunge attacking 2077. It wasn”t caused by excessive optimism stumbling. It”s likelier that the plunge became extended, and not the rally.
Still, RSIs were oversold at the 2077.25 low, which can be retested down to 2073. That”s unfinished business below, but it won”t necessarily prevent rallying first. In fact, oversold RSIs remain outstanding at Wednesday 1046 low.
Thursday afternoon”s 2091 bias-up target requires a retest. And its test is likely to retest Wednesday night”s 2093 high, which doesn”t otherwise require a retest. But since Thursday afternoon”s buyers didn”t gain traction for their efforts, resuming the rally Friday morning all but requires gapping up above Thursday”s highs (which would probably also form a “session-long rally” setup).
Details and other markets coverage are in the post-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/jrcfffz
After 6::30 ET, monitor overnight Globex action in the chaRTroom at:
Win XP-Friendly — http://anymeeting.com/866-095-323
non-xp friendly — https://roddavid10.mitel-nhwc.com/join/shkphyy