Posts by Rod David
I”m on the @Benzinga #PreMarket
I”m on the @Benzinga #PreMarket Prep show answering questions LIVE at 9:20am ET
http://bit.ly/1fejpV2
— Meanwhile, here”s the recording of our pre-open Market Tour:
https://roddavid10.mitel-nhwc.com/join/rkrmyhj
— And here”s more of the slides from our 1977 summer camping trip to Pisgah National Forest, North Carolina:
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 back to Monday afternoon”s 2108.75 low extended through the morning to probe under Monday”s 2100.50 pre-open low, finally bottoming during the noon hour upon only touching the support of yesterday afternoon”s 2095.50 bias-down signal. Rallying through the bias environment to 2107.25 then ranged sideways to close back above last week”s intraday lows.
Overnight action”s new info…
Initially sliding to 2101.75 ahead of Yellen”s overnight speech, a trading range developed back up to 2104.25. It eventually broke into a much steeper, deeper slide through Europe”s opens. Yesterday”s lows are being attacked now down to 2097.00.
If, then…
Overnight selling has been relentless, but (so far) only within yesterday”s range — yesterday afternoon”s range. Sellers haven”t accomplished anything not already done yesterday (so far). Breaking lower anyway through the open would suggest that the week-old topping pattern is already launching a downleg. Meanwhile, so long as the open isn”t breaking lower, last week”s high remains vulnerable to a retest. And its retest would still likely begin optimistically, by gapping up and/or surging through the open. ADP”s release in a half-hour is a possible catalyst to resolve the overnight dip.
First Trade…
Exiting the open at 9:45 under 2099.00 would be likely also to trigger the 2101.00 bias-down signal at 10:15. Exiting the open above 2104.25 would be unlikely to trigger bias-down.
Trading Plan for 3/4
If Wednesday morning isn”t trying retest the highs… then a new downleg may be underway already.
Pattern points… (Setups and technicals)
Monday rejected the Thursday-Friday “ineffectual pessimism.” Two days spent exclusively in negative territory, testing prior lows, but not trending down, followed by a close above both. But that didn”t prevent Tuesday from probing under both.
Prior lows held, as they had Thursday-Friday. Described another way, prior lows were further chipped away, without yet breaking lower.
Still topping, or already topped?
Tuesday was more ineffectual pessimism. Gapping down, spending the entire session in negative territory, and probing under prior lows, but only intraday. The topping pattern that began last Tuesday, and which was confirmed last Wednesday, hasn”t yet launched a downleg.
But it”s vulnerable.
Regardless, last week”s high is still likely to be retested. Opening only slightly lower Wednesday, flat and firming, or gapping up — an intraday rally would remain likely. But trending down through the open, triggering bias-down, would suggest the topping is complete.
What”s Next… (Outlook and opportunities)
Wednesday”s econ calendar is swamped, into and out of the noon hour. Even before then, Yellen speaks overnight. Reaction to ADP helps us to anticipate Friday”s reaction to payrolls. More Fed speakers into the noon hour are followed by the Beige Book release.
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2112.00 | 2110.25 |
| …would target | 2117.75 | 2116.00 |
| Bias-down: under | 2102.75 | 2101.00 |
| …would target | 2098.00 | 2096.25 |
| 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.
Tuesday”s post-close Market Wrap recording
Tuesday”s post-close Market Wrap recording is linked here:
https://roddavid10.mitel-nhwc.com/join/kfpzkys