Posts by Rod David
More to come?
Objective met, but can it extend?
“No-bias” would have triggered this morning, even if the 2090.75 bias-down signal were never touched. The balance of the morning could ranged unpredictably. No harm, no foul.
Touching the bias-down signal first, and then not triggering it, is different. That means sellers expended a relevant amount of energy, and that they gained no traction for the effort. There is a consequence to their ineffectual pessimism — an offsetting test of the 2099.75 bias-up signal was put into play.
We already knew there was room for noise under the bias-down signal down to 2087.00, and it was attacked to within 1 tick. And we already knew from there being unfinished business above, that the bias-down wasn”t likely to trigger.
But not until 10:15 were we any more assured that the bias-down signal”s test would hold. Which it did. And now the 2099.75 bias-up signal has been touched to within 1 tick.
Its pullback limit is being tested now, and the test”s 3-minute low is 2097.50. Despite having trended up throughout the morning, not violating the pullback limit”s test would allow the recovery to trend up through the noon hour, too. Unfinished business above at 2101.50 is an attraction, with potential for probing it to new highs.
Afternoon bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2103.00 | 2099.75 |
| …would target | 2107.25 | 2104.00 |
| Bias-down: under | 2098.75 | 2095.50 |
| …would target | 2092.25 | 2089.00 |
| Signal status: BIAS-DOWN | 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.
Post-open review
Another day, another doomed dip.
The pre-open Grexit drama had reversed a 6-point surge to 2099.50 with a 9-1/2 point plunge to 2090.00. Room for noise under it to 2087.00 was attacked to within 1 tick during the open”s first several minutes. And held.
That helped to suggest the 2099.75 bias-down signal would be recovered through 10:15 to avoid triggering. And it was recovered, triggering “no-bias.” Having held a test of the bias-down signal, an offsetting test of the 2099.75 bias-up signal is in-play.
Currently, just filling the gap back to yesterday”s 2095.50 futures close is causing the recovery to hesitate. Getting through interim resistance at 2097.50 would help to confirm the current leg”s momentum remains intact. I would expect any fresh high to also fulfill the unfinished business above at 2101.50.
This morning”s pre-open Market Tour
This morning”s pre-open Market Tour recording is linked below:
https://roddavid10.mitel-nhwc.com/join/tybmjjk
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…
Perhaps it was probably the afternoon”s impending FOMC Minutes release that kept Wednesday morning within a choppy 2089.00-2094.50 sideways range. If so, then the same inhibition prevented the gap down from extending. Extending down wasn”t likely, anyway — but neither the favorable knee-jerk reaction to FOMC nor its follow-up did more than probe momentarily into positive territory at 2097.00.
Overnight action”s new info…
Narrow ranging down to 2093.25 plunged ahead of Europe”s opens, probing yesterday”s low down to 2087.25. Recovering back to 2093.25 suddenly surged 6 points to 2099.50 on news that Greece officially requested a loan extension, and that the ECB saw it as a positive sign. Wait, there”s more. Germany rejected the request, triggering an even faster 9-1/2 point plunge to 2090.00. So, it”s going to be one of those days.
If, then…
The more recent plunge is a 61.8% extension of the original surge”s measurement. It”s calculable support. Not that it must hold, but it allows the reaction down to be only a temporary correction that recovers to higher highs. And, why not, since Grexit may be resolved in principle very soon. Greece seems conciliatory, ECB seems agreeable, and Germany is keeping the tit-for-tat lively. The market had better agree quickly, because the next leg down would be much bigger than 9-1/2 points. Not coincidentally, the plunge”s extremes are defined by this morning”s bias signals, and breaking one would likely trend.
First Trade…
Exiting the open at 9:45 under 2087.00 would make the 2090.75 bias-down signal likely to trigger at 10:15. Exiting the open above 2094.25 would be unlikely to trigger bias-down. Above 2096.50 would be likely at least to test the 2099.75 bias-up signal, which won”t be any likelier to trigger without also already recovering above 2101.50.