Posts by Rod David
Post-open review… Proof barely positive
Yesterday”s late drop retraced entirely. For a moment.
Opening at 2070.50 was quickly bought up to consolidate 1 tick above the 2066.75 preliminary indication at 9:45, making the 2075.00 bias-up signal likely to trigger at 10:15.
Which it did.
It also to within 3 ticks of the 2081.00 bias-up target, at least retracing all of yesterday”s last-hour drop. That did react back down to within 1 tick of 2075.00, but bias-up wasn”t rejected through 10:30 which would have invalidated its 10:15 state.
Now, the only way to invalidate the 10:15 signal is to exit the bias environment at 11:30 under the open”s 2070.50 low. But there”s no way that could possib… wait, what?
A buy signal at 2077.50 was touched, but not pierced, just when another downleg began (presumably triggered by the EIA report). It tumbled to 2066.50. Being a knee-jerk reaction to news, its oversold RSIs don”t require a retest.
In fact, its reaction is now attacking 2073.00. That”s won”t be deep enough to invalidate the 2075.00 bias-up at 11:30. But already recovering 2075.00 and 2077.50 by then would be optimal.
Another pre-open surge has tried
Another pre-open surge has tried proving that yesterday”s late drop was by weak-handed sponsorship. Wednesday”s pre-market Tour identified what post-open levels and behaviors would confirm that, or not. We also discussed the Precious Metals pullback and Crude Oil reaction, along with how the long bond”s Double Top can”t further delay performing:
https://roddavid10.mitel-nhwc.com/join/vsmmjxh
P.S. I”ll republish it later as a blog post, but there”s an interesting exchange on the Activity Feed”s prior post.
The First Trade… Suspended animation.
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…
Tuesday”s opening surge was retraced entirely after probing above Monday”s high, but recovered quickly from 2072.25 to a higher high that fulfilled the bias-up target. Despite maintaining the potential for resuming the rally, ranging sideways into the final hour broke 10 points under 2077.50 support.
Overnight action”s new info…
The late break”s 2066.00 objective was met soon after the cash session close. A later probe under it by only 6 ticks was recovered to 2073.75. That has since reacted back down to within 6 ticks of 2066.00.
If, then…
End o”quarter earnings season kicks off unofficially today with the high-profile post-close Alcoa (AA) announcement. Whether they”ve been talked down enough will be obvious when the first miss resolves in higher prices. That won”t prevent an initially negative knee-jerk reaction, and the market might meanwhile be walking on eggshells. This afternoon”s FOMC Minutes should have the same inhibiting effect before its release. A path higher can greet these obstacles either from higher ground where a reaction down can be more easily absorbed, or else from lower levels after trapping shorts. The latter path runs the risk of attracting fresher sellers, since yesterday”s pullback is already testing 2066.00 support, with further room only 5 points lower. Perhaps the most suspicious effort would be rallying early to 2075.00-2077.50 resistance without exceeding it.
First Trade…
Exiting the open at 9:45 above 2076.75 would be likely also to trigger the 2075.00 bias-up signal at 10:15. Exiting the open under 2069.00 would be unlikely to trigger bias-up, and likely at least to test the 2066.00 bias-down signal intraday.
[Tuesday”s post-market Wrap recording is
[Tuesday”s post-market Wrap recording is here:
https://roddavid10.mitel-nhwc.com/join/rkrrmvp]
Tuesday”s rejection of Monday”s last-hour drop recovered levels that suggest all prior highs will be recovered, too. This is regardless of the afternoon”s slide, and despite the slide ending under the lows of Monday”s last-hour drop. The reason? Timing windows.
Tuesday”s rally legs developed during relevant timing windows — triggering the morning”s bias-up signal would be the most obvious. Yes, its target was met, and its target served as the session high. But its reaction down started too late to be sponsored by strong hands, due more to the 3:10-3:20 timing window..
There was enough momentum to trigger a sell signal (at 2077.50) upon entering the final hour. Its great productivity was as much a function of strong-handed buyers being patient, instead of defending during a timing window that is largely irrelevant.
That selling pressure quickly extended after the close to its 2066 target, which will be easier to recover in the morning. Actually, if not already in recovery mode overnight, or at least gapping down to the support of “lower prior highs” at 2061, then something much more substantial is attracting price back down. There remains potential for one more slightly higher high before ultimately resolving down, which can be tricky if the cause of that ultimate resolution is gaining on us.
REMINDER: TRAINING SESSION THURSDAY AT 6PM ET
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2082.25 | 2075.00 |
| …would target | 2088.00 | 2081.00 |
| Bias-down: under | 2073.00 | 2066.00 |
| …would target | 2068.25 | 2061.00 |
| Signal status: BIAS-UP | 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.