Posts by Rod David
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2090.75 | 2083.75 |
| …would target | 2097.00 | 2090.00 |
| Bias-down: under | 2078.75 | 2071.75 |
| …would target | 2073.25 | 2066.25 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open review… Round two, out of three?
Open”s retest of pre-open low goes poorly.
The pre-open bounce from 2082.25 to 2092.00 was retraced at least 61.8% before the open. Had that 2085.75 measurement held, then post-open strength would have trended up sharply.
But that last line in the sand to avoid fresh lows didn”t hold. The low”s retest extended down sharply to 2072.50.
This is the retest of uptrending support described during the pre-market Tour. It was fulfilled during the bias timing window. But it wasn”t rejected. Price was still consolidating at 10:15, similar to one of the criticisms of yesterday”s post-open consolidation.
Now a 7-point bounce to 2079.50 is reacting down under a 2076.00 sell signal. Its objective is fresh lows, potentially down to 2066.00. The minimum requirement to invalidate this break would be to recover back above 2081.00.
The passively bullish WedEX may yet prevent trending down this afternoon under whatever is the morning”s low. WedEX may facilitate a recovery from probing fresh lows during the afternoon. But meanwhile, buy signals from under a prior high will be less credible than after bottoming has formed.
Bloomberg outage: Cause, scapegoat, or
Bloomberg outage: Cause, scapegoat, or both?
The etymology of “scapegoat” is ancient rituals that transferred the sins of a community to a goat that was let loose in the wild, taking its new “cargo” away forever. The global Bloomberg terminal outage inhibits participation, so it is a very real contributor to the pre-open plunge.
It might still be a scapegoat, to a conspiracy theorist. Highly-levered central banks must stay up late at night wondering how they”ll ever get out of the corners they”ve painted themselves into — but without leaving their own footprints on the floor. Blame it on Grexit, inflation, etc. Trading desks going dark? Better than being a victim-less crime, it”s not a crime but has plenty of victims.
So, if the blame game can”t exploit a worldwide communication breakdown and launch a new downleg, then the rally remains intact. There”s still an open to navigate — and expiration open, no less — but absorbing these overnight shocks can point sharply higher today. Otherwise, may as well unplug your Bloomberg…
Here”s the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/pcxxzzz
The First Trade… Bloomberg down, world comes to an end (in that order)
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…
Wednesday night”s slide tested Tuesday”s “lower prior highs” into the 2088.00-2090.00 range. That was also the morning”s bias-down target. The 2095.00 bias-down signal was recovered at the open, but didn”t trigger either way at 10:15 or at 10:30. Nevertheless, the balance of the session worked higher until touching the morning”s 2104.75 bias-up signal during no-bias trending.
Overnight action”s new info…
A downward drift worked its way back into yesterday”s opening range. Narrowly consolidating at 2096.00-2098.00 suddenly broke lower into a 14-point plunge attacking 2082.00. The cause is tied to Bloomberg terminals going off-line globally. With everything being down from communication (i.e. chat) among trading desks to Central Bank activities (e.g. ECB QE buying), it might as well be a weekend. And with two days of illiquidity just hours away, exposure was reduced wholesale, and the selling drove prices down sharply.
If, then…
Yesterday”s no-bias rally was the sign of weak-handed buyers, like the opening range”s optimism that prevented a healthy blip-down before rallying. That kept alive potential for another dip today if the rally wasn”t extending. This vulnerability was leveraged by Bloomberg”s outage into an extra 6 points (attacking 2082.00 where 2088.00 would have sufficed). Without rebooting soon, there”s no assurance that another wave of selling won”t hit. Holding or recovering Tuesday”s 2088.00-2090.00 “lower prior highs” through the open is my line in the sand between rallying this morning, or extending down — either way, expiration is likely to exacerbate it. All else being equal, the underlying uptrend remains intact, with Bloomberg being the wild card.
First Trade…
Exiting the open at 9:45 under 2084.00 would be unlikely to recover the 2088.00 bias-down target through 10:15 and renew the bias-down signal. Exiting the open above 2090.00 would be likely to hold the bias-down target and not renew bias-down. Exiting the open above 2095.00 would be unlikely to trigger the 2093.25 bias-down signal.
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2110.25 | 2104.00 |
| …would target | 2116.50 | 2110.25 |
| Bias-down: under | 2099.75 | 2093.25 |
| …would target | 2094.25 | 2088.00 |
| 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.