Posts by Rod David
The pre-open recovery from 2095.25
The pre-open recovery from 2095.25 has been eking its way back to the 2105.25 overnight high. Resuming the rally today shouldn”t take too long to be obvious after the open. So, every minute without recovering from a post-open dip would become increasingly vulnerable to extending back down under yesterday”s highs. More detail is in the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/zvsvbwk
The First Trade… Back to last week’s highs.
Proper context can start the day with a solid win and make all the difference.
Enter the chaRTroom here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Monday”s gap up extended higher to touch the upper-end of its renewed bias-up target at 2095.25-2097.50. Not exceeding it through a relevant timing window prevented putting into play any higher objective. The afternoon ranged choppily back down to 2092.00. A post-close drop extended down to 2089.25.
Overnight action”s new info…
The rally”s resumption was immediate, slowing pessimistically upon attacking Monday”s highs, and then surging through them to a fresh high. That was extended to 2105.25, within 1 tick of last Wednesday”s high. Its reaction retraced 61.8% of the overnight gain back down to 2095.25, consolidating almost three hours back up to 2101.00.
If, then…
Last Wednesday”s late break was considered to be sponsored by weak hands, and it was retraced entirely Thursday. Friday”s much deeper drop was also considered to be weak-handed, and now that has been retraced entirely. Weak-handed sponsorship can produce detours, which by definition are only temporary. New highs remain likely, potentially today, if another detour doesn”t appear. Today, that vulnerability is probably limited to the open holding a test of last week”s highs, if not also falling back under yesterday”s highs
First Trade…
Exiting the open at 9:45 abov 2105.50 would be likely also to renew the bias-up signal by exceeding its 2104.00 bias-up target through 10:15. Exiting the open under 2095.25 would be unlikely to trigger the 2098.25 bias-up signal at 10:15.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2105.25 | 2098.25 |
| …would target | 2110.75 | 2104.00 |
| Bias-down: under | 2094.75 | 2088.00 |
| …would target | 2089.00 | 2082.00 |
| 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.
Perhaps it was pre-earnings jitters
Perhaps it was pre-earnings jitters that inhibited Monday morning”s rally from extending higher during the afternoon. The cash session dipped to 2092.00, which was as deep as possible while still being considered only noise. Post-close action dipped 2 points lower, which was also within its noise range.
Sellers” afternoon efforts didn”t gain any traction by the time it would have mattered. And then they extended the pullback even deeper, expending even more selling pressure, when it was too late to matter. That”s “ineffectual pessimism,” which is potentially bullish from a contrarian perspective.
Optimally, that bullish resolution would start Tuesday by gapping up above the morning”s high 2097.50 high. An overnight dip could test 2088.00 and then recover 2091.50 to suggest momentum is reversing up already. But opening under 2086.50 would deal a crushing blog to Monday”s recovery, and target a retest of Friday”s low… for starters.
Here”s the recording to Monday”s post-close Wrap:
https://roddavid10.mitel-nhwc.com/join/mjvvrmj
https://roddavid10.mitel-nhwc.com/join/mjvvrmj
Pre-close view… Didn’t break it, time to make it.
Afternoon consolidation should be ending now.
The noon hour and bias environment edged lower. But the pattern wasn”t distributive, so there was no sell signal.
The bias environment was exited under the noon hour”s 2094.50 low, which was the first time a sell signal was considered. But the sell signal was only touched and not triggered. So the final hour wasn”t entered any lower. Sellers didn”t gain traction after edging lower through two consecutive timing windows.
Entering the final hour above the bias environment”s 2095.50 high would have been bullish, but that was barely attempted. Trending up through the 3:10-3:20 proxy window to probe the noon hour”s 2096.75 high would be bullish, too. An as that window now opens, 2096.75 is being attacked to within 3 ticks.
If buyers gain traction here, the balance of the session could fulfill expectations for sharply higher highs into the close. But it all depends on extending higher through 3:10-3:20.