Posts by Rod David
The reaction to this morning”s
The reaction to this morning”s anti-Grexit leak has ranged sideways widely, but held its gains. Recovering from Friday afternoon”s drop was expected, but will trying to start it this way simply extend through the open? What if it doesn”t? We discussed those paths in the pre-open Market Tour:
s://roddavid10.mitel-nhwc.com/join/vsmyrrs
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…
Monday didn”t produce the recovery that the pattern suggested would be likely after temporarily extending Friday afternoon”s decline down to 2044.50. The decline extended temporarily Sunday night, but its recovery was held to a break-even at 2051.50. The afternoon”s lower low down to 2036.50 didn”t gain traction wither, recovering back into the overnight range. “Unfinished business above” at 2055.75 was created by the morning”s no-bias environment. So, sellers didn”t gain traction despite trying, while buyers created a higher target without really trying.
Overnight action”s new info…
Narrow ranging at 2043.50-2046.00 had firmed to almost 2048.00 ahead of Europe”s opens. A dip to 2041.00 was recovered back to the initial range”s upper-end. Then Europe blinked — news (i.e. trial balloon) of a 6-month extension for Greece just triggered a 12-point, 12-minute surge to 2059.00.
If, then…
The attraction to unfinished business above at 2055.75 is now neutralized. Thursday”s cash session and futures closes (2055.50-2057.50) represent last week”s high close, and they”re now being retested as resistance. These are all resistance, and trending up will be difficult without entering a timing window above them. Don”t forget the pattern of trial balloon headline, market reaction that gauges its acceptance, then actual details. This morning”s headline may be valid, but it has yet to be validated, which will be treated as an separate news item.
First Trade…
Exiting the open at 9:45 above 2053.00 would be likely also to exceed the 2055.75 bias-up target through 10:15 to renew the bias-up signal. Exiting the open under 2050.75 would be unlikely to trigger the 2049.00 bias-up signal.
Morning bias
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| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2054.50 | 2049.00 |
| …would target | 2061.00 | 2055.75 |
| Bias-down: under | 2043.25 | 2038.00 |
| …would target | 2038.25 | 2032.75 |
| Signal status: BIAS-UP INVALIDATED | 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.
Here”s the recording to Monday”s
Here”s the recording to Monday”s post-close Market Wrap:
https://roddavid10.mitel-nhwc.com/join/tybjkyj
Trading Plan for 2/10
If the rally just needed an extra day to re-organize… then Monday”s fresh lows can be dismissed. Sunday night”s lower low was recovered back up to Friday”s cash session close. Monday afternoon”s lower low was recovered back into Sunday night”s range. All of which barely signals that the selling didn”t do new damage, and none of which yet signals momentum has reversed up.
Pattern points… (Setups and technicals)
So, round two Tuesday, for resuming last week”s rally? Reacting down from a retest of the two prior highs is predictable enough to have an impact. Reversing down into a new downtrend is too predictable to be credible.
That doesn”t prevent extending the reaction down overnight, or into Tuesday morning. Potential to 2032.00 remains outstanding since Monday”s late bounce didn”t recover a prior high like 2046.00.
Similarly, extending the bounce overnight would target 2049.00, whose recovery through Tuesday”s open would then target at least 2055.75. That”s just to satisfy the “unfinished business above” which was left outstanding from Monday morning”s bias environment. Multiple opportunities to invalidate it were rejected.
What”s Next… (Outlook and opportunities)
The likely resolution to resume the rally remains intact. That doesn”t preclude a sudden, steep and substantial drop — but there isn”t yet a sell signal, and its next opportunity to trigger is not until Tuesday”s bias timing window.