Posts by Rod David
To dive, or not to
To dive, or not to dive, that is the question as the overnight drop indicates an opening challenge to this morning”s bias-down signal, while a probe under yesterday”s lows tries attracting price even lower… all before price action may become paralyzed ahead of this afternoon”s FOMC events. Here”s the recording of the pre-market Tour:
https://roddavid10.mitel-nhwc.com/join/hthvrmx
The First Trade.
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 gap down under Monday afternoon”s low had triggered a “session-long decline.” Every timing with one exception was likely to probe under the prior timing window”s low, which the morning fulfilled down to 2056.25. But following the noon hour”s likely exception, no other timing probed lower. However, probes above both bias-up signals up to 2070.50 were delayed or rejected before being able to gain upside traction that could invert or invalidate the session-long decline signal. A late dip through the close fell to 2064.00.
Overnight action”s new info…
Continually firming through the night eventually touched 2070.00, but that was the end of that. The three hours since then have slid relentlessly. Yesterday”s low was attacked to within 3 ticks at 2057.00. My expectations for a wild afternoon are being validated.
If, then…
Invalidating yesterday”s session-long decline setup would have made probing under yesterday”s low unlikely. Not invalidating it allowed fresh lows to remain possible, but still not required. The setup”s most relevant influence is its context, which gapping up today would have killed. The open is still some time off, but gapping down to yesterday”s low is currently indicated, so the question is whether this morning will compensate for the delay in fulfilling yesterday”s bearish signal. Gapping down might avoid extending lower as volatility becomes paralyzed by anxiousness ahead of this afternoon”s FOMC events. But unless the open is already the drop is credible for extending to 2053.25-2054.00 or to 2048.00-2048.75 before paralysis sets in.
First Trade…
Exiting the open at 9:45 back above 2063.50-2064.50 would be unlikely to trigger the 2060.25 bias-down signal 30 minutes later at 10:15. Exiting the open under 2058.25 would be likely to trigger bias-down.
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2079.75 | 2071.50 |
| …would target | 2086.00 | 2078.00 |
| Bias-down: under | 2068.25 | 2060.25 |
| …would target | 2061.75 | 2053.50 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN 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.
Tuesday morning”s “session-long decline” setup
Tuesday morning”s “session-long decline” setup didn”t probe lower lows under 2056 during the afternoon. But three probes above 2065.25 failed to extend and invalidate the bearish setup. Fresh lows are still outstanding, albeit not required. Gapping up Wednesday would be more credible for extending higher. Here”s the post-close Market Wrap that explains more:
https://roddavid10.mitel-nhwc.com/join/hthvrzx
Pre-close view
The noon hour”s counter-trend bounce back above 2060.25 fulfilled its 2062.50-2063.50 target. And then extend higher.
Still testing the afternoon”s 2065.25 bias-up signal at 1:20 invoked the grace period, but it was still being tested at 1:30 to avoid triggering.
The bias-up signal was probed by a surge up to 2069.00. Reacting down to 2063.50 through the 2:30 enabled the 2065.25 bias-up signal to define the bias environment”s upper-end.
Now the final hour approaches. The “session-long decline” has missed at least one timing window for probing under the prior timing window”s low. That should get underway pretty quickly to probe under the prior timing window”s low before.
Back above 2066.25 would start to suggest the session-long decline setup was invalidated.