Posts by Rod David
The overnight 13-point drop from
The overnight 13-point drop from 2082 to 2069 was retraced a little but further during the pre-market Wrap (recording linked below). That has continued improving to the 2080 optimal open that would begin to suggest the drop is isolated to the overnight action. Upside follow-through can be steep and substantial, and not yet being obvious in a recovery by 9:45 would start to suggest a retest of overnight lows. More details here:
https://roddavid10.mitel-nhwc.com/join/wzcxfyb
The First Trade… Starting in the hole.
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”s opening break extended down through the morning to fulfill the retest of Friday”s oversold RSIs at 2083.50. Extending down through the noon hour tested the decline”s 2081.25 objective. And lower lows going into the bias environment fulfilled potential for noise down to 2078.75, with an extra point of room. Bouncing to 2086.25 into the final hour opened the door to a short-squeeze, but it never materialized. Instead the entire bounce was retraced into the cash session close.
Overnight action”s new info…
.Choppy sideways action never extended yesterday”s decline, even through Europe”s opens where selling had been resuming. But a 13-point downleg began later, dropping to 2068.75. Only 1-minute RSI diverged positively there, but that was enough to launch a 61.8% retracement of the drop back up to 2076.75.
If, then…
Fulfilling all downside objective yesterday took all of the session”s time, leaving none for rejecting the lows. Gapping up today above the late-afternoon bounce would have compensated for that delay, but the vulnerability to extending down seems to have won out. Overnight, at least, as the new downleg may have a scapegoat (Deutsche Bank offices raided) that allows knife-catchers a reason to step in. Isolating the reaction to overnight by opening in positive territory could trigger the short-squeeze that yesterday”s bias environment exit had suggested. Otherwise, the little support that is clustered 1-2 points under the 2068.75 overnight low would be the last defense against targeting 2044.00.
First Trade…
Exiting the open at 9:45 under 2076.50 would be likely also to probe under the 2075.50 bias-down signal at 10:15, and under 2072.50 would likely trigger it. Exiting the open above 2081.25 would be unlikely to trigger bias-down, and above 2085.00 likelier to trigger the 2084.25 bias-up signal at 10:15.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2085.50 | 2084.25 |
| …would target | 2090.50 | 2089.25 |
| Bias-down: under | 2076.25 | 2075.50 |
| …would target | 2071.50 | 2070.25 |
| Signal status: LATE BIAS-DOWN | 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.
All unfinished business below was
All unfinished business below was neutralized Monday. But no accumulation pattern formed — or, at least, none was triggered. A recovery is possible, but not signaled. And not recovering here is very vulnerable to extending the decline considerably.
Closing under 2078.75 would have signaled a more substantial drop underway. Perhaps one is, but 2078,75 was still being overlapped at the close and not broken decisively. It was probed down to 2076.25 before the futures close, which anyway recovered to 2079.
A short-squeeze setup wasn”t exploited. Sellers didn”t exploit that opening, either. But if that wasn”t just a delay and Tuesday”s open isn”t already rallying through Monday afternoon”s 2086.25 high, then the morning is probably extending down sharply,.
Monday afternoon”s 2086.25 high printed before the final hour, and before the close trended down. Gapping up above 2086.25 Tuesday would still be credible for forming a session-long rally.
More details were discussed during the post-market Wrap, recorded here:
https://roddavid10.mitel-nhwc.com/join/vsmbwvb
Overnight links to view chaRTroom action:
XP-Friendly: http://anymeeting.com/305-331-078
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Pre-close view… Squeeze play, or head-fake?
Timing windows have aligned.
The bias environment began lapsing at 2:30 by surging through a 2080.50 buy signal. The final hour was entered above the bias environment”s 2082.00 high.
All of that buying pressure came after the bias environment had probed fresh trend lows at 2077.75. That also followed neutralizing attractions below — from the oversold RSIs at Friday”s 2083.50 low to 2081.25 and then this afternoon”s 2078.75 bias-down target.
Apart from oversold RSIs at this afternoon”s low, the path is clear for a short-squeeze. So clear, that if not exploited, then buyers are truly damaged.
Back under 2082.00 (being tested now) would put into play at least a retest of the 2077.50 low, for one last chance to form a durable bottom. Back above 2086.50 would all but require extending higher through the close.