Posts by Rod David
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2114.50 | 2112.25 |
| …would target | 2120.25 | 2118.25 |
| Bias-down: under | 2107.75 | 2105.75 |
| …would target | 2102.00 | 2099.75 |
| 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.
Another bite at the rotting apple.
Not quite exploiting the rally potential.
Although this morning”s sellers didn”t gain traction, neither did buyers. The post-open bounce to 2109.50 has been tested and retested, and even re-retested. But each test has reacted back down into the range.
Fresh session highs would be attracted back up to yesterday”s highs around 2112.75. And it would be more easily exceeded than if it were probed earlier. Retesting Wednesday”s 2117.75 high would be a likely attraction.
There”s no requirement to probe higher — or lower, although a retest of this morning”s 2103.25 low becomes likely if the noon hour isn”t entered or exited above 2112.75.
Post-open review
The most reliable path higher this morning would have gapped up above yesterday”s highs to trigger bias-up. That, or else exit the first hour above the bias-up signal anyway, invalidating the no-bias signal.
Neither path was followed.
Chicago PMI triggered a plunge that came within 1 point of the bias-down signal. But without actually touching the bias-down signal before triggering no-bias, an offsetting test of the bias-up signal isn”t in-play.
At least we”ve established the traction gained by yesterday afternoon”s won”t be rewarded this morning. That”s very important to continue forming the topping pattern. A retest of prior highs today remains possible, albeit not required. And a retest of prior highs during the afternoon”s bias environment remains likely to reverse down, albeit not require.
In case you were wondering,
In case you were wondering, the recording of this morning”s Market Tour is right here:
https://roddavid10.mitel-nhwc.com/join/zvsfyvy
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…
The topping indicated Tue-Wed while probing new highs was followed by Thursday”s entire session being spent in negative territory. The post-open dip to 2103.75 was retraced entirely back up to the 2111.75 opening high, and the afternoon”s lower low at 2101.50 was recovered to 2110.25, but neither recovered positive territory. The setup is called “ineffectual pessimism,” since selling didn”t actually reverse the trend down. Still, sellers were productive when it mattered to gain traction — exiting the bias environment under the noon hour”s low and entering the final hour even lower. They also left oversold RSIs outstanding at Thursday”s 2101.50 low.
Overnight action”s new info…
Thursday”s late bounce was soon retraced down to 2106.00. Price action since then has ranged around it between 2105.25-2108.75
If, then…
Will yesterday afternoon”s sellers be rewarded for having gained traction? That would give them control of this morning”s bias-environment, whether just probing under the open all morning, or actually trying to trend under yesterday”s low. It”s not yet too late for a rally effort that gaps up above yesterday”s highs to invalidate yesterday afternoon”s sellers, but it will be too late soon. After opening flat-to-lower, this morning”s only remaining path higher would be to duplicate Tuesday”s late rally — its effort would be doomed to failure, as Tuesday”s effort finally failed Wednesday. But patient sellers squeezing out the last bit of weak-handed buying wouldn”t be inappropriate for the topping process.
First Trade…
Exiting the open at 9:45 under 2101.50 would be likely also to trigger the 2102.25 bias-down signal at 10:15. Exiting the open above 2115.25 would be likely to trigger the 2112.75 bias-up signal.