Posts by Rod David
The overnight plunge attacked 2079
The overnight plunge attacked 2079 before reacting up meaningfully, to as high as 2086.50. That was retraced almost entirely before reacting up again, more meaningfully, testing and 2091.
It”s a good start, but a start to… what? Either to being in proximity for the open to recover 2091.25-2092.50, and then extending to 2100-2101… or, to refueling sellers from around 2088 for a post-open plunge. Essentially, either the market behaves immediately like it”s found value, or it gets disappointed. Here”s more detail in the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/vsmrccp
Gold and Bonds — Gently into the night, but not out of it.
One didn”t go gently into the night, and the other went a little too easily.
Gold and Bonds have had uneasy nights. Bonds much more so, as Gold only recently became volatile, and remains within a pre-defined range.
Gold has been challenging its 1182.70 sell signal. Its break would target a retest of the prior leg”s 1170.00-1174.00 target to 1161.50-1164.00, if not also extend to 1150.00-1154.00.
Yesterday”s test of 1182.70 was being overlapped into the close, which was under 1187.00, keeping it in-play. a $12-13 spike up 90 minutes ago has put the range”s 1194.50 resistance into play.
Recovering 1194.50 would only undermine the decline. A bottom would be signaled by closing above 1201.50. That said, not reversing back under 1187.00 this morning would at least begin to undermine the decline.
Bonds, meanwhile, had rallied last week from testing 153-10 back up to 157-00. That was obviously too much, too quickly, requiring at least a correction down to 154-30. Under 154-16 signaled that was extending into a retest of 153-10, potentially down to 152-20.
153-10 and 152-20 did not hold, and new lows overnight are testing 151-16.
That may seem excessive, and perhaps it is — if only for the near-term. But the decline”s traction remains intact so long as bounces hold 152-13, with potential down to 149-22. Back above 152-26/152-28 would signal a bigger bounce underway targeting 154-16.
The First Trade… That might leave a mark.
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…
Firming at Monday”s open peaked upon touching Friday”s 2113.50 prior high. Its recovery was necessary to resume Friday morning”s rally, since buyers were fully rewarded and had failed to gain new traction. Trending back down through the afternoon”s bias environment stopped a little optimistically short of its potential to at least 2102.50. Last-hour selling took over by probing the lower-end of its potential down to 2098.50. No unfinished business below was left outstanding.
Overnight action”s new info…
Monday”s late dive extended to test 2096.00. Relatively narrow ranging tired of the status quo, and eventually firmed up to 2101.00. Apparently, that only angered the market into snapping back down sharply to fresh lows. A seemingly relentless slide has extended to attack 2079.00 — along the way, ignoring three consecutive 3-minute RSI positive divergences (four 1-minute divergences). The last divergence was finally recognized by printing at least 2085.00. And then it reacted back down to 2082.00.
If, then…
Two points: First, while yesterday”s pullback was sufficient to extend the rally targeting new highs lower lows at 2091.25-2092.50 would have confirmed. And still could. Recovering at least that much by the open, and then improving through the open, could probe new highs today. Today, not a typo… Second, the alternative is diametrically opposite, and then some. Three consecutive ignored positive divergences (bouncing only shallowly before extending lower) happens when market facilitators panic calmly. At this stage, either they”ve absorbed very large selling pressures, or at least an equivalent amount is yet to come. The former would form a bottom, while the latter could last all day — conservatively targeting the 2062.00 area. More so, the latter could take new highs off the table… A third bonus point: Among other scapegoats, the drop is associated with Greece”s debt payment scheduled today. Making it wouldn”t end their crisis, but it would likely end this leg. Meanwhile, VZ just announced it is buying AOL at a 20% premium to yesterday”s close, so scapegoats for a rally aren”t all dead.
First Trade…
Exiting the open at 9:45 above 2093.50 would be likely to recover this morning”s 2092.50 bias-down target through 10:15, and not renew the bias-down signal. Exiting the open under 2084.50 could extend next to the 2077.00 area.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2110.25 | 2105.00 |
| …would target | 2106.50 | 2101.50 |
| Bias-down: under | 2103.50 | 2098.50 |
| …would target | 2097.75 | 2092.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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.
This will be very, very
This will be very, very ugly if not contained here. An otherwise uneventful overnight range had been hugging yesterday”s post-close 2096 low. It had even started firming, surging somewhat to within 2 ticks of 2101.50. But, apparently, that only stretched the rubber band, and it snapped back hard. A relentless 20-point slide from there has extended to 2080.25.
And here”s something we haven”t seen in awhile — three consecutive RSI divergences resolved in lower lows… I”ll have more soon in the First Trade blog post, and then during the morning the pre-market Tour. Tune in now at:
Win – XP friendly: http://anymeeting.com/770-463-232
non-xp ilinc-Mitel: https://roddavid10.mitel-nhwc.com/join/bfyytsh