Posts by Rod David
Is the pre-open slide going
Is the pre-open slide going to upset yesterday”s upward momentum, and prevent probing fresh highs this morning? Or, is it really just an optical illusion, which I described in the First Trade blog post? I showed the illusion during the pre-open Market Tour, and discussed how to spot whether the illusion is becoming reality. Here”s the recording:
https://roddavid10.mitel-nhwc.com/join/pcxjwzy
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…
Gapping up to and through Wednesday afternoon”s 2041.00 high triggered a “session-long rally” setup by rejecting Wednesday”s sell-off to 2030.50. The open”s surge to 2051.50 was probed before noon. The last hour”s surge extended again to test 2059.00. And buyers gained traction for their efforts, exiting the bias environment above the noon hour”s high, and entering the final hour even higher.
Overnight action”s new info…
After a dip attacked 2055.00, fresh highs were probed up to 2061.25. Choppy ranging tested it again. But despite recovering from another dip that attacked 2055.00, a very steep 90-minute drop is now testing yesterday morning”s 2051.00 high as support.
If, then…
The successful “session-long rally” setup tends to trend higher through the next morning. This would appear to be doing the opposite, but it looks worse than it is, so far. This pre-open drop hasn”t yet done any damage that can”t be rejected and recovered by the open. Even though the market is down 6-7 points from yesterday”s cash session close, it”s still supported by “lower prior highs” from intraday yesterday. In other words, its trend hasn”t reversed down. The rest is just an optical illusion — the drop looks bigger on the chart because being very recent it is very steep, and because it fresh highs had been probed overnight. And 2051.50 which is being tested now is relevant support, being this morning”s bias-down signal. Regardless of the opening print, potential to probe fresh highs this morning remains alive unless rejected by the opening 15 minutes of volatility.
First Trade…
Exiting the open at 9:45 under 2049.25 would be likely also to trigger the 2051.50 bias-down signal 30 minutes later at 10:15. Exiting the open above 2055.75 would be unlikely to trigger bias-down. The 2060.00 bias-up signal won”t be any likelier to trigger until also exiting the open above 2063.00.
“Session Long Rally” setup
My “session-long” rally setup triggered at Thursday”s open. Even before the open, seeing the gap up indicated, we know the chances were very high for trending up throughout the day.
Trending down into the prior day”s close, and then rejecting it at the following open, is the basis for the setup. But there are several bells and whistles that further define the setup.
The most important other characteristic is that the prior afternoon”s high must have printed before the last 60-90 minutes. Gapping up above it would qualify as rejection.
Each of my intraday “timing windows” is then expected to probe above the prior timing window”s high. Every timing window but one, which is usually the noon hour. When the noon hour confirmed, we were even more certain that sellers were marginalized for the day.
There are several caveats. One is that not maintaining the gap up can be as bearish as the setup would have been bullish.
Session-long declines are signaled the very same way. And the following session tends to resolve in a specific way, too. But that”s another video.
The recording to Thursday night”s
The recording to Thursday night”s Training Series — Session #1:
https://roddavid10.mitel-nhwc.com/join/vsmcfrk
Thursday”s “session-long rally” held up
Thursday”s “session-long rally” held up through the close. Having gained traction, its buyers earned the reward of controlling Friday morning”s bias environment, too. And being a Friday, the morning”s bias tends to persist through the noon hour. So long as the open doesn”t gap back down under Thursday afternoon”s low, sellers could be marginalized until late-afternoon. Here”s the recording to the post-close Market Wrap:
https://roddavid10.mitel-nhwc.com/join/vsmcfck