Posts by Rod David
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2885.75 | 2889.50 |
| …would target | 2891.75 | 2896.00 |
| Bias-down: under | 2874.75 | 2878.75 |
| …would target | 2862.25 | 2872.25 |
| Signal status: LATE BIAS-DOWN | . | |
| NEW: 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… Settling in.
Volatile reaction to payrolls defines the open’s range.
There were two knee-jerk reactions to the pre-open Employment Situation report. 
It was greeted at 2904.00 and spiked up to 2915.00. That included almost 3 points of errant ticks. Its immediate reaction back down extended 17 point to 2898.25.
The next reaction can’t be considered knee-jerk because of the elapsed time. But it was almost as dramatic, surging 13 points to test 2911.00.
That’s a lot of volatility to compress into a brief window. Especially pre-open, which inhibits post-open sponsorship. More so, greeting the open essentially unchanged reflects just that, no sponsorship. It took several minutes before starting to firm, ultimately to touch 2914.00 resistance. And it took several minutes there before starting to fall and then test 2903.00.
Still, despite post-open trending attempts finally emerging, another bounce has taken price back to unchanged.
The initial bounce held a test of the 2911.00 bias-up signal, putting into play an offsetting test of the 2900.25 bias-down signal. Testing it this morning should define the window’s lower-end, and then be vulnerable to break lower. Probing it this morning would be required to retrace 2900.25 before being reliable for breaking lower, while being vulnerable to recovering.
The First Trade & Pre-open Tour Recording… Trouble ahead, trouble behind.
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…
Wednesday night’s 2913.25 overnight low had recovered to greet Thursday’s open at 2924.00. Its test held “higher prior lows” and didn’t attract reinforcements. The open slid back under 2919.00 that had been critical to hold into last weekend. Its break confirmed downside projections of 2901.00 and 2896.00 without any particular timing requirement. Both were met by noon, and the afternoon’s 2888.00 renewed bias-down target was met at the bias environment’s exit. The balance of the session bounced through the close up to 2906.00-2908.00, at two-week old higher prior lows.
Overnight action’s new info…
Thursday’s late bounce extended initially to 2915.50, but had fallen back down to Thursday’s 2906.00-2908.00 close. Ranging into Europe’s opens suddenly collapsed back down to 2901.00, which has now reacted back up to 2906.00-2908.00 ahead of this morning’s Employment Report.
If, then… (notes to accompany the Tour recording)
Closing back above the relevant levels of 2901.00, 2894.00 and 2888.00 suggests the selling pressure targeting them was fulfilled. Selling pressure this morning would be the product of new sponsorship. It would be vulnerable to being trapped on a 2-3 point retest of Thursday’s 2888.00 low. Not holding its test would next target 2879.00 for probably the last near-term or nearby chance to avoid a much more substantial decline. An initially favorable knee-jerk reaction to the pre-open Employment Situation report could reach higher prior lows at 2928.00-2929.50, where timing would determine whether Friday Factors still allow another downdraft, or else trigger the short-squeeze that Thursday afternoon’s bounce tried to be.
First Trade…
[Click here to view the Bias parameters] No preliminary indications are considered ahead of the Employment Situation report.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2906.75 | 2911.00 |
| …would target | 2912.75 | 2917.00 |
| Bias-down: under | 2896.00 | 2900.25 |
| …would target | 2889.50 | 2893.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| NEW: 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)
Wednesday night’s drop to 2913.25 had recovered to greet Thursday’s open at 2924.00,. The open slid back under 2919.00 to prove the pre-open bounce wasn’t attracting reinforcements. That did not, in itself, point any lower. It only created the vulnerability to other influences pointing lower.
And those other bearish influences did not, in themselves point lower so quickly. Downside projections of 2901.00 and 2896.00 had no particular timing requirement. Meeting them so quickly (and the afternoon’s 2888.00 renewed bias-down target) only creates other vulnerabilities.
Price action was at least momentarily responsive to the relevant levels of 2901.00, 2894.00 and 2888.00, bouncing to 2905.00 into the final hour. Closing back above them suggests that selling pressure was fulfilled. Friday morning selling pressure would be the product of new sponsorship. And new sponsorship is vulnerable to being trapped.
So, a knee-jerk negative reaction to Friday’s payrolls report must still break a new relevant level to reflect strong-handed sponsorship. Which is entirely possible, and then entirely vulnerable to resuming the decline into the weekend. Absorbing an initially negative knee-jerk reaction could instead find Friday Factors triggering the short-squeeze that Thursday afternoon’s bounce tried to be.
Higher highs into the close up to 2908.00.50 recovered all of the relevant downside levels. The 2-week old 2907.50 prior low was still being tested, so we can’t be assured momentum had reversed up. The pattern remains vulnerable to a bearish reaction on Friday’s pre-open report, and to extending its bias through the noon hour.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.