Posts by Rod David
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2907.25 | 2911.00 |
| …would target | 2915.00 | 2918.75 |
| Bias-down: under | 2900.00 | 2903.75 |
| …would target | 2892.75 | 2896.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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… We warned them.
Pre-open buyers get carried away, get heads chopped off.
I described the bullish scenario in the pre-open Market Tour and First Trade post: 
Keep optimism in-check. Aggressive gaps up have been meeting a reliable pattern of significant intraday pushback. None so significant as today’s.
Opening under yesterday’s 2920.00 post-open high could have crept higher without enticing sellers. But the 2923.00 open was already above yesterday’s post-open high, and also above its 2921.25 pre-open high. The first bar’s dip back down to 2920.00 extended relentlessly back down to touch yesterday’s 2904.50 low.
The 2906.50 bias-down signal was overlapped at 10:15 to invoke the grace period, and ultimately held to trigger no-bias. Had sellers been patient to avoid touching 2906.50 so early, offsetting tests of BOTH bias-down parameters could have been put into play for having rejected tests of both bias-up parameters. Impatient sellers instead extended the pattern unsustainably, and now a bounce is targeting a test of the 2914.50 bias-up signal.
Being a late no-bias, the bounce is vulnerable to failure. The collapse was likely not only to touch yesterday’s low but to probe it, if not also Monday’s low. Back under 2907.25 would start to signal the decline is resuming. Meanwhile, extending the bounce above 2914.50 would target 2920.00 or higher.
The First Trade & Pre-open Tour Recording… Tip-toe, to the tulips.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Tuesday’s gap up to 2919.25 from a (two-day) multi-session range. Intraday reinforcements weren’t attracted to replace the relentless overnight trend’s retiring sponsorship. Similar to previous gaps up and intraday rallies, Tuesday’s fresh high quickly attracted overwhelming sellers that trended back down relentlessly into the last half-hour’s 2904.50 low. Its reaction recovered to test Monday’s 2910.00 close — which was still being overlapped up to 2912.00 at the close. Both the 2919.25 open’s gap up above all prior highs, and the 2921.25 pre-open “new Globex trend extreme,” were left outstanding, still requiring a retest.
Overnight action’s new info…
Several hours of sideways ranging between 2909.00-2913.00 suddenly spiked up to 2918.00. And then it gradually retraced back down to 2913.00, which held through midnight. Price action since then has steadily crept higher, and is now attacking 2918.00 to within 2 ticks.
If, then… (notes to accompany the Tour recording)
I’m reminded of the recent move, “A Quiet Place.” The trick to rallying post-open is not to make any noise that will get its sponsorship noticed. Gapping up by too much would once again be likely to attract distribution that pushes price back down. But gapping up within yesterday’s range — and not already reversing back down under a relevant level through the opening 15 minutes of volatility — would be likely to resume and extend the overnight rally through the morning. Likely objectives of yesterday’s opening print and pre-open highs could be probed up to 2926.50-2928.00 before the monsters sellers recognize strength to sell into. Otherwise, retracing too much of the overnight gains could also alert sellers that the bounce has already failed, and selling into it could fuel at least a retest of Tuesday’s low.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2916.75 would be likely to trigger the 2914.50 bias-up signal at 10:15. Exiting the open under 2912.00 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2910.25 | 2914.50 |
| …would target | 2917.25 | 2921.50 |
| Bias-down: under | 2902.25 | 2906.50 |
| …would target | 2895.25 | 2899.50 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL, TESTED BOTH BIAS-UP PARAMETERS | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Paraphrasing, “Behind every higher high there stands a gap up.” Lately, at least.
Tuesday’s gap up was the product of relentless overnight trending. Often enough, intraday reinforcements aren’t attracted to replace the relentless overnight trend’s retiring sponsorship. Similar to the overnight trend’s two higher highs that were retraced to their origins, Tuesday’s gap up to 2919.25 was retraced to pierce 1 tick under Monday’s 2910.00 close.
That was the minimum structural likelihood for a reversal. A calculable objective at 2908.50 was probed down to 2904.50 when plunging into the position-squaring window. Its reaction recovered to test Monday’s 2910.00 close — which was still being overlapped up to 2912.00 at the close. So, in addition to maintaining the pattern of selling intraday bounces and gaps up, overnight rally gained no traction for its effort.
Meanwhile, the Dow outperformed ES again overnight, extending its overnight rally to within one hour of the open, while ES continued ranging sideways. Dow also outperformed when the afternoon collapse barely pierced the morning’s low, while ES made decisively fresh session lows. However, NQs also outperformed both ES and the Dow, neither of which probed fresh post-open highs as did NQs. So, day-two of the comparison wasn’t equally bearish, but we’ll be extra interested on Wednesday ahead of this week’s expiration.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.