Posts by Rod David
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2715.00 | 2716.50 |
| …would target | 2722.00 | 2723.50 |
| Bias-down: under | 2702.25 | 2704.00 |
| …would target | 2694.25 | 2696.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN 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.
Post-open Review… Another over-eager low.
Open’s attack on overnight low reacts up.
The 2698.50 overnight low’s reaction up to 2710.00 held. Retracing only 38.2% of the overnight drop from 2728.00 reflected excessive pessimism. This made extending down more difficult than from a 61.8% correction. But it could be done.
It wasn’t.
2700.50 was quickly touched and recovered by increasingly wider swings, eventually touching 2716.00. Which is within 2-3 ticks of the overnight drop’s 61.8% correction. Levels not recovered include:
- 2711.00 …The bias-down target maintained its break to renew the bias-down signal, next targeting 2704.00. Which was already touched, so retesting it during the bias environment would likely break lower, too.
- 2704.00 …Holding as resistance through the opening 15 minutes of volatility at 9:45 creates a position of weakness. It can’t prevent trying to bounce, but should doom to failure any bounce attempt.
Speaking of which, about that bounce to 2716.00. It’s struggling now, but extending would target 2723.50. Its origin would still be from a position of weakness, dooming it to failure, likely to reverse down or not even recover above 2716.00.
Back under 2710.50 would signal the bounce already failing, targeting 2704.00 and potentially a more substantial break below.
The First Trade & Pre-open Tour Recording… Time didn’t heal this wound.
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 morning’s rally rewarded Thursday’s buyers for having gained traction. Gapping up to 2730.00 extended higher through the bias environment to 2745.50. Thursday’s close back under 2718.00 created a position of weakness for launching Friday morning’s rally. So the rest of Friday gradually retraced the post-open gains. And then quickly retraced much of the pre-open gains down to 2720.75. Collapsing under the opening gap signaled its rejection. Ending back under Thursday’s highs increased the vulnerability to gapping down Monday.
Overnight action’s new info…
Sunday night’s open blipped-up to 2725.25 then spiked down to 2712.50. The spike down was triggered by news of a not-new story (WTO exit), and recovered to test this morning’s 2727.25 bias-up signal. But it was straight down from there — relentlessly, more than aggressively — to greet Europe’s opens at 2702.00, soon extending to 2698.50. Price action since then has consolidated back up to 2710.00.
If, then…
There’s nothing bullish about probing under 2704.00 again, as did three of last week’s sessions. Support there has been thoroughly chipped away, including 10 points lower where Thursday morning found its low. Post-open action may not dip back down to 2704.00 or it may isolate its test to the open. Not already recovering 10 points higher through the open would remain vulnerable to another downleg.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2709.75 would be unlikely to recover the 2711.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open under 2715.00 would be likely at least to trigger the 2718.00 bias-down signal.
Sunday Review — holiday, payrolls, Bitcoin.
There’s no Saturday Review this weekend, but there’s still a few major points to consider for the upcoming week…
Holiday week — Independence Day is on Wednesday, and Tuesday is an early close. That’s odd, 3-day weekends are much more common among U.S. exchanges. Be careful not to force a trade, because it’s difficult to generate sponsorship for trending. So, consider giving reversals more credibility than breakout attempts.
Employment Situation week — Injecting this high-profile report into holiday shortened/interrupted week can have unusual reactions. The same may be said for Thursday’s FOMC Minutes, which isn’t usually released this late in the week.
Bitcoin, et al — The pattern’s latest downleg was defined before it began as an ongoing series of aggressive downlegs interspersed with tempered uplegs. And we would know that was ending if their roles were reversed, which was almost the case last Sunday (first arrow on nearby chart). The decline hasn’t worsened since then, and now another big upleg appeared late Saturday. I’m giving Bitcoin — and Ethereum — a benefit of the doubt that the reversal is developing. This may be premature, and the pattern still needs confirmation of more strong uplegs. The alternative is another steep downbar.
CHARTROOM WILL RE-OPEN AT 6:00 PM ET TONIGHT.
[Please login from the Starting Point]
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2725.75 | 2727.25 |
| …would target | 2731.50 | 2733.00 |
| Bias-down: under | 2716.50 | 2718.00 |
| …would target | 2709.50 | 2711.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN 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.