Posts by Rod David
Post-open Review… Waiting for another shoe.
Sunday night’s range holds through the open.
The pre-open recovery back up to the 2930.00 open didn’t break higher. That prevented an Isolation setup from forming. A post-open ally could have developed anyway, but the pre-open reaction only extended back down to the 2923.25 low.
Reactions up to 2929.00 still overlapped the 2927.00 bias-down target at 10:15 to avoid renewing the bias-down signal. But this is still a bias-down environment. And extending down anyway would next target 2921.25 (not being tested by 2 ticks).
Exiting the bias environment under 2919.00 would start to signal something more substantial underway than this morning’s drop. Perhaps the defensive posturing will continue until the market can become comfortable that China doesn’t have additional retaliatory strikes, other than what it announced already last week. Back above 2927.00 would start to signal a bottom is forming.
The First Trade & Pre-open Tour Recording… The discounting is in.
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…
Friday afternoon’s bullish WedEX influence wasn’t. A “new Globex trend extreme” had formed overnight, which was neutralized by piercing it 6 ticks up to 2947.00 during the pre-open minutes. Although that had avoided the earlier threat of a Globex-Flip setup under 2938.00, the morning dipped back down to 2938.50. Other than gapping up, bouncing to 2944.00 was the only bullish behavior. But that reversed down just when the WedEX’s influence should have pushed price higher. Quite the opposite, the afternoon resolved down to its 2932.50 bias-down target through the expiration close.
Overnight action’s new info…
Saturday we discussed whether Friday’s post-open decline was defensive posturing ahead of Monday’s new tariffs on China. Even if already fully discounted, a knee-jerk reaction to the news would be normal. So, Sunday night’s gap down to 2929.50 wasn’t surprising or unusual. A pattern soon formed that targeted 2921.25-2923.00, and its upper-end was touched. Bouncing back into the range held up through Europe’s opens, inspiring confidence for retesting the open’s gap up to 2930.00. That has formed an Ascending Triangle.
If, then… (notes to accompany the Tour recording)
Lower price doesn’t necessarily equate to traction. We applied that to Friday afternoon’s shallow relentless drop back to 2836.00 support — lower lows were probed too late to be relevant. We’re now applying it to last night’s gap down. Unless selling pressure exits a window under a relevant level to gain traction, it is actually pent-up buying pressure. We’re not relying on the WedEX to be influential this morning if it wasn’t on Friday afternoon, but it should be very influential if it does compensate for the delay. Meanwhile, while the open’s gap disqualifies a Globex-flip setup, probing Friday’s lows overnight does create potential for an Isolation setup. All of which is probably premised on China tariffs being discounted. Speaking of whom, we haven’t heard from China, and retaliatory tariffs would deserve at least another knee-jerk reaction down to 2919.25 before suggesting anything more substantial.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2936.00 would be unlikely to trigger the 2932.00 bias-down signal at 10:15. Exiting the open under 2927.00 would be likely to trigger bias-down.
Saturday Review’s recording (for 9/22/18) …Higher stocks, literally and figuratively.
A fast-moving week, even for Barron’s
This week was interesting. The Dow finally joined S&Ps with its own new highs, ending in Quadruple Witch expiration, with the Pot stock frenzy getting greater exposure.
There’s an interesting week ahead, too. The FOMC policy statement may hike rates, the Fed chair’s quarterly Q&A is always fun to trade, and end-o’quarter portfolio window dressing could help to absorb dips and power rallies. All starting with what the U.S. already announced, $200 billion in tariffs against China to be issued Monday, who already announced $60 billion to be levied in retaliation.
Meanwhile, the bigger picture continues ratcheting higher, and pointing higher, with each higher high creating new pullback limits and targets. Specific levels and paths there are discussed in detail at the start of this week’s Saturday Review. I also update my Cannabis sector stock coverage and themes.
The following stock requests were reviewed in this order:
TLRY, IIPR, TGODF, ACBFF, CGC, KSHB, FB, AMZN, AAPL, NFLX, GOOG, TSLA, NKE, T, GE
transcript
Saturday Review Link
An interesting week behind: New highs, Quadruple Witch, and Pot stock frenzy.
Am interesting week ahead: FOMC Meets, Fed Chair speaks, and quarter-end window dressing.
Be sure to join us by 9:30am ET for this weekend’s Saturday Review. After discussing the bigger picture and gaming out strategies for playing next week’s likelier opening setups, we’ll do instant analysis of any stock charts that you request… See you there!
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2935.25 | 2941.00 |
| …would target | 2941.75 | 2947.50 |
| Bias-down: under | 2926.25 | 2932.00 |
| …would target | 2921.25 | 2927.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| 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.