Posts by Rod David
The First Trade… Recovery in limbo.
Proper context can start the day with a solid win and make all the difference.
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(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Tuesday morning”s dive from 2104.25 to 2088.25 was recovered into the bias environment”s exit. Probing under the bias-down signal and two bias-down targets was rejected back up to 2110.25. The critical 2090.00-2095.25 range held another test. What could be more bullish? Attracting new sponsorship. But the only probe higher came into the futures close, which reached 2112.50.
Overnight action”s new info…
Downtrending into Europe”s opens reach 2108.00, then recovered to Tuesday”s 2112.50 post-close high. Rather than extend higher, the lows were just probed down to 2106.00.
If, then…
A proxy to attracting new sponsorship yesterday afternoon would be to gap up this morning. That likelihood looked much better 3 hours ago when yesterday”s 2112.50 post-close high was being retested. Opening back under yesterday”s highs could still qualify by surging immediately. Otherwise, the most bullish scenario would be to back-and-fill ahead of this afternoon”s FOMC policy statement. But then, greeting the news from a position of weakness would be problematic if yesterday”s lows had not already held a retest.
First Trade…
Exiting the open at 9:45 under 2101.50 would be likely also to trigger the 2104.25 bias-down signal at 10:15. Exiting the open above 2111.00 would be likely at least to test the 2112.75 bias-up signal, which would likely trigger after exiting the open above 2114.75.
Did Tuesday morning”s recovery attract
Did Tuesday morning”s recovery attract new sponsorship? Can it still? This is kind of important, because it will make the difference between resuming last week”s breakout rally, or else launching a decline much more powerful than Tuesday morning”s slide.
The afternoon”s bias environment didn”t extend above the recovery”s 2110.25 high. Neither did the final hour. Only the reaction up from a late dip to 2105.75 support managed to probe higher, to 2111.75. Even that was problematic, since the cash session close only made it up to 2109.75, under the recovery”s high.
The consequence to not attracting new sponsorship, even in the most bullish scenario, would be for a corrective dip targeting 2098-2099. Dipping a little deeper would risk becoming attracted to retesting oversold RSIs at the plunge”s 2088.25 low. That low wasn”t made to be retested… only broken.
In the absence of having probed intraday above the recovery”s highs, gapping up Wednesday could still serve by proxy as attracting new sponsorship. Gapping up, preferably above 2114.75, and extending higher.
Here”s more detail in the post-market Wrap:
https://roddavid10.mitel-nhwc.com/join/fbfkwks
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2119.00 | 2112.75 |
| …would target | 2123.75 | 2117.75 |
| Bias-down: under | 2110.25 | 2104.25 |
| …would target | 2104.25 | 2098.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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.
Pre-close view… Standing still is to fall.
Recovery still needs to squeeze a couple of shorts.
Trending higher through the noon hour probed the 2109.00 afternoon bias-up signal by 5 ticks. It avoided the grace period by 1 tick, but was invalidated by failing to hold it through 1:30.
The bias environment drifted back down into the 2104.25-2105.00 range, whose resistance launched the overnight and post-open drops. Now its support must launch a closing rally.
Just ranging sideways through the close would suggest a downleg tomorrow or overnight. Its recovery wouldn”t be assured — getting to within the orbit of this morning”s oversold RSIs at 2088.25 would make its retest likely. And it”s retest isn”t likely to hold. A corrective dip to only 2099.00 could still qualifying as refueling the rally.
But why bother with another dip. The recovery from probing again under 2190.00-2195.25 is equivalent to 3 Red Bulls and half a Ritalin. The rally would be better served by getting some of that out of its system, by closing above the bias environment”s highs, preferably at least above 2114.75. And preferably by extending through the 3:1–3:20 timing window since the final hour”s entry didn”t trend.
Livestox, April 28 2015… Tech time?
Tuesday”s Livestox was wide-ranging. I began with a discussion of this morning”s roller coaster ride in the broader market. We discussed implications for its recovery, and for its failure. Then we talked stocks.
Were Biotechsx sold a little harder Monday as a hedge against an AAPL earnings miss? That might suggest Tuesday”s extra dip in sympathy with the broader market makes Biotechs attractive.
And what about AAPL. Why is this pre-earnings pattern different from the last one, despite their similarities? And, just how likely is it to probe one more higher high before my collapse pattern takes over?
Following are the next stocks we discussed, in order…
AAPL
IBB
BIIB
CELG
GILD
GPRO
SIVB
NFLX
TLSA
BABA
FEYE
TWTR
CARA
CLDX
BLCM
CLF
OXIS
GTLS
NLNK
BAK
BTU
GBLX
NEM
BAS