Posts by Rod David
Post-open review… Borrowing from post-open Peter.
Pre-open rally extends enough to attract sellers.
Another reminder that there can be too much of a good thing. Extending the rally required maintaining a gap up this morning, since yesterday afternoon”s buyers didn”t gain traction for their efforts. Surging after 8:30”s econ report had extended to fresh highs at 2109.25 just before the open. And that attracted more sellers than reinforcements.
Reacting several points down immediately at the open crossed back under 2108.00. Having touched 2108.00 post-open, not recovering it at 9:45 would be unlikely to trigger the 2105.50 bias-up signal.
That extended to within 3 ticks of the 2098.00 bias-down signal. But its test has been put into play, because a half-hour of choppy narrow ranging triggered no-bias, and the bias-up signal had held its test.
Or, has it?
The 2098.00 objective could be invalidated by recovering the 2105.50 bias-up signal at 10:30. In fact, a bounce tested it just minutes before, but still failed to recover it. No-bias could still be invalidated by exiting the bias environment above the 2108.50 post-open high so long as a fresh post-open low hasn”t yet printed.
I”ve already pointed out in the chaRTroom how the first half-hour”s pattern has already foreshadowed this morning would likely range choppily, or narrowly, or both. Not optimal for trading. And now 2105.50 is being retested, which at least offers an optimal short-entry. So long as it holds as resistance, 2098.00 is in-play.
8:30”s econ report was surprisingly
8:30”s econ report was surprisingly weak, shifting the odds away from the Fed hiking rates. Meanwhile, the probe of overnight lows had extended down to support at this morning”s 2098 bias-down signal. Perfect timing, enabling a reaction up that is probing the 2107 overnight high by 2 points. The challenges and consequences were discussed during the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/yptrzbp
The First Trade… High hopes ahead of the weekend.
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…
Having met and held its 2088.00 target during Thursday”s immediate drop, the balance of the morning ranged back up to its 2095.50 bias-down signal. This made me suspect that buying pressure was overwhelming lower attractions. In fact, the balance of the session rallied back to Wednesday”s 2104.25 FOMC-reaction high. But the rally didn”t gain traction for its effort.
Overnight action”s new info…
Very narrow flat-to-higher ranging from 2101.00 suddenly surged up to 2107.00 just after Europe”s opens. That was gradually retraced back into the earlier range, and then through it. Now a fresh low is attacking 2099.25.
If, then…
Having failed to gain traction for Thursday afternoon”s efforts, gapping up would enable the rally to resume uninterrupted and possibly also to extend considerably higher. Meanwhile, having trended up into Thursday”s close, gapping down under the afternoon”s 2098.50 low could form a “session-long decline” setup targeting at least a probe under Thursday”s lows.Regardless, this being a Friday, the morning”s bias tends to persist through the noon hour.
First Trade…
Exiting the open at 9:45 under 2096.00 would be likely also to trigger the 2098.00 bias-down signal at 10:15. Exiting the open above 2108.00 would be likely also to trigger the 2105.50 bias-up signal at 10:15.
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2112.25 | 2105.50 |
| …would target | 2118.25 | 2111.50 |
| Bias-down: under | 2104.75 | 2098.00 |
| …would target | 2100.00 | 2093.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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”s recovery back up to
Thursday”s recovery back up to Wednesday”s 2104 high didn”t probe above it. The pre-open high was barely probed by 1 point. The recovery barely probed positive territory. And it left unfinished business outstanding at oversold RSIs that formed while fulfilling the morning”s 2088 target.
But Thursday”s recovery was more impressive than not. Wednesday”s relatively modest net improvement following FOMC was retraced entirely. And Thursday”s opening drop would have been justified to extend lower and neutralize attractions nearby. This repeats a pattern seen several times previously this week, in which sellers are nominally satisfied and then substantially reversed.
This pattern need not repeat from here. In fact, Thursday afternoon”s buyers gained no new traction for their efforts. But extending higher overnight and gapping up Friday morning would be credible for extending sharply higher intraday. Otherwise, dipping back down to 2096 would be difficult to resume Thursday afternoon”s recovery, and easier to resume Thursday morning”s decline.
Details and other markets coverage were discussed in the Market Wrap:
https://roddavid10.mitel-nhwc.com/join/cxsybhp
Monitor overnight action in the chaRTroom here:
XP-Friendly: http://anymeeting.com/851-388-869
xp UN-friendly: https://roddavid10.mitel-nhwc.com/join/shkphyy