Posts by Rod David
All systems seem to be
All systems seem to be “go” for continuing to track the bullish template that suggests aggressively probing new highs. What could possibly go wrong. Actually, that”s not a rhetorical question, and today”s pre-open Market Tour addresses it:
https://roddavid10.mitel-nhwc.com/join/tybjzyp
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…
Thursday”s 10-point gap up at the morning”s 2074.00 bias-up target soon extended to pierce Wednesday”s freakish post-close surge to 2079.50. The morning”s bias environment dipped back down to 2074.00, and that was the last of that. The balance of the session trended up to fresh highs, eventually touching 2085.50. And the rally gained traction for its efforts.
Overnight action”s new info…
A shallow dip to 2081.50 was already firming into midnight, and has since extended higher to 2089.75, piercing December”s prior high by 1 point.
If, then…
The range between January”s channel and December”s high has been retraced relentlessly, already producing a new high. This continues to track the template we”ve been monitoring as the likeliest resolution. That template”s own likeliest resolution is to reverse down aggressively, too, but not until after probing the prior high.. Probing prior highs should be today. Especially considering that this morning”s bias environment should be controlled by buyers to reward them for controlling yesterday afternoon. The only potential obstacle would be created by the open”s gap up expending so much energy that it attracts more sellers than buyers — since Friday morning”s bias tends to persist through the noon hour, and intraday counter-trend sponsorship is difficult enough to attract on a Friday afternoon, let alone before a three-day weekend. Don”t forget that this is the area that four consecutive sessions in December probed fresh highs intraday and yet failed to gain traction.
First Trade…
Exiting the open at 9:45 above 2088.75 would be likely also to trigger the 2087.50 bias-up signal at 10:15. Exiting the open under 2083.00 would be unlikely to trigger bias-up.
So many reasons why the
So many reasons why the rally should persist into the weekend. And so much downside if it does not. More on that, and more, in Thursday”s post-close Market Wrap:
https://roddavid10.mitel-nhwc.com/join/rkrcvrb
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2091.50 | 2087.50 |
| …would target | 2096.50 | 2092.75 |
| Bias-down: under | 2083.00 | 2079.25 |
| …would target | 2078.00 | 2074.00 |
| Signal status: LATE BIAS-UP | 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.
Trading Plan for 2/13
If this were expiration week… then the WedEX would have been bullish into and out of the weekend. However barely mildly bearish it was Wednesday, was totally invalidated by gapping up Thursday. There are differences in applying the WedEX setup ahead of a three-day holiday weekend, but the expectation would still be bullish into the weekend.
Pattern points… (Setups and technicals)
The rally is entrenched. By exiting Thursday”s bias environment above the noon hour”s high, and then by entering the final hour above the bias environment”s high, buyers earned the reward of controlling Friday morning”s bias environment.
The weekend”s impending illiquidity can leverage that entrenchment, since counter-trend sponsorship is difficult to generate. All the more so ahead of a three-day holiday weekend. The entrenchment, which marginalizes sellers — not necessarily the gain, since Friday afternoon”s can suddenly stop trending and start ranging narrowly.
Usually, the reward is produced by literally trending above prior highs during the morning, even if the open were to gap down. A similar setup Wednesday was less rewarding, or at least delayed the reward until the afternoon. Perhaps that was news-related, but the likelihood is still for probing higher highs.
This particular Friday has less exposure to headlines. But being a Friday, the morning”s bias tends to persist through the noon hour. So, triggering bias-down in the morning could still produce downside. And considering all of the bullish setups, not trending higher in the morning would suggest a deeper afternoon drop is possible.
What”s Next… (Outlook and opportunities)
Don”t forget there is no Saturday Review on holiday weekends. Please be sure to request stock chart analyses during the day Friday. Also, we”ll review the bigger picture during Friday”s post-close Market Wrap, which all Saturday Review attendees are welcome to attend. We”ll be discussing the ongoing template that looks for aggressively probing new highs and then rejecting them just as aggressively.