Posts by Rod David
Go big, or go down.
Noon hour entered around the open. Big recovery requires big buying.
This morning”s drop had probed back above the 2063.50 opening print by 5 points. The reaction down held 1061.00, entering the noon hour overlapping 2063.50.
Despite its overlap including this morning”s 2065.00 bias-down target, that”s not high enough early enough to suggest sellers have been trapped, let alone that buyers are retaking control.
Back above 2067.00 would start getting that benefit of the doubt. That”s largely because the decline is free to resume, and there”s no requirement for any bounce at this stage. Even then, this being the noon hour, bouncing any higher must be maintained to be relevant.
Post-open review… Starting the end?
Post-open dip recovered entirely. Pre-open dip, not so much.
The overnight slide to 2065.00 had formed a Descending Triangle which was presumed to be preparing a break lower. Which it did, pre-open, to test 2062.00. Momentarily firming into the open was rejected by a deeper plunge to 2056.50.
A bounce there was retraced entirely back to the 2063.50 opening print before the first half-hour had ended. That price action qualified as an early recovery attempt. The recovery has since retraced the pre-open Descending Triangle”s 2069.00 high.
The continued recovery has formed an uptrend of higher highs and higher lows. All of which remains in negative territory. Recovering above the open this early doesn”t leave much room for another dip without resuming the decline.
Back above the 2071.75 bias-down signal would get a big benefit of the doubt that the trend is reversing up — at least for near-term bottoming to form. Entering the noon hour back under 2065.00 and 2063.50 would suggest the decline never ended, and that 2051.00 is in-play.
This morning”s 2065 bias-down target
This morning”s 2065 bias-down target was tested moments after the First Trade blog update was posted. Its reaction up to 2069 was retraced entirely, as was a shallower bounce, forming a Descending Triangle. Now the pattern”s support at the 2065 bias-down target is being probed down to 2063.75. We discussed bottoming and extension setups and other markets coverage during the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/wzjfvsc
The First Trade… Slip-slidin’ away.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
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(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Despite Friday”s 2097.00 open begin essentially flat with Thursday”s close, it spiked down immediately 6 points back to Thursday”s lows. Closing Thursday under 2099.25had put into play 2077.00 with room for noise down to 2073.00, and they were tested down to 2070.00. Firming through Friday”s final hour was still overlapping the 2073.00-2077.00 target, not decisively holding it or breaking it.
Overnight action”s new info…
Sunday night”s firm open eventually attacked this morning”s 2081.00 bias-up signal to within 1-2 ticks. But selling pressure had become evident already ahead of Europe”s opens, perhaps concerned by China”s renewed crashing. Trending down since then has now begun probing under Friday”s low down to 2067.00 — just 2 points 2065.75 — just 3 ticks from this morning”s bias-down target.
If, then…
In the absence of gapping up, even the most bullish scenario was still likely to probe fresh lows. Gapping down too much or simply not recovering quickly would indicate that late retail sellers were being joined by a new round of stronger hands distributing. And if the decline is extending this morning, then today”s eventual drop could overshadow Friday”s.
First Trade…
Exiting the open at 9:45 under 2070.00 would be likely also to trigger the 2071.75 bias-down signal at 10:15. Exiting the open under 2060.00 would be likely also not to recover the 2065.00 bias-down target, renewing the bias-down signal and next targeting 2051.00. Exiting the open above 2077.00 would be unlikely to trigger bias-down.
Globex opens at 6pm ET.
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