Posts by Rod David
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2669.25 | 2669.25 |
| …would target | 2676.75 | 2677.00 |
| Bias-down: under | 2658.25 | 2658.50 |
| …would target | 2650.75 | 2650.75 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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… The mother of all ineffectual optimism.
Relentless overnight rally retraces entirely.
Having probed 5 points above yesterday’s highs to test 2688.00, maintaining a gap up would have been reliable for trending up this morning. O
dd. Ongoing “ineffectual optimism” since Friday’s low had been suggesting the entirely opposite resolution.
Either an overwhelming opposing undercurrent was emerging, or else the overnight rally’s optimism would be rejected. The overnight rally had last formed a Symmetrical Triangle. The pattern tends to break falsely in one direction before reversing more substantially in the opposite direction. But that reversal would have to be underway through the opening 15 minutes of volatility.
Already sliding greeted the open at 2682.00. Choppiness tested the 2683.00 bias-up target as resisarameters were rejected, putting into play offsetting tests of both bias-down parameters at 2663.50 and 2655.25. The low so far is 2666.00. The signal triggered late, so its objectives aren’t required. They’re likely anyway, since the signal triggered late while probing fresh post-open lows.
More significant is all but confirming the trend is down. Yesterday’s low was itself shallower than the interim price action deserved. Recovering the 2683.00 bias-up target would suggest otherwise. Meanwhile, bounces are likely to fail.
The First Trade & Pre-open Tour Recording… Not so ineffectual optimism.
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…
Monday’s higher open at 2677.00 reacted down a couple of times into negative territory under 2668.00, but didn’t extend. A bigger bounce attacking 2683.00 only stretched the rubber band, and snapping back down eventually probed fresh session lows attacking 2657.00 — filling the week-old gap where Friday’s 2660.00 low had stopped optimistically short. The final hour bounced to unchanged at 2670.00-2671.00. No unfinished business was left outstanding above or below.
Overnight action’s new info…
Yesterday’s late bounce has extended higher relentlessly. First gradually, and eventually a little steeper up to 2688.00. That is 5 points above Sunday and Monday’s highs, probing further into “higher prior lows.”
If, then…
Repeated instances of “ineffectual optimism” began with Friday’s late bounce that had stopped short of support. Its minimum consequence was fulfilled yesterday by afternoon’s lower low, which held a test of support. Several other instances of ineffectual optimism developed before the test, suggesting the test would ultimately fail to hold. Really? The rally since is indicating a gap up above that entire range. Obviously, maintaining a gap up above resistance would contradict the objective of breaking under support. The question is whether the gap up is maintained, or if a gap up is even still indicated at the open. Maintaining a gap up would get every benefit of the doubt for extending higher. Rejecting the gap up anyway would be that much more bearish.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2680.25 would at least be likely to trigger the 2675.50 bias-up signal at 10:15. Exiting the open above 2687.75 would be likely also to exceed the 2683.00 bias-up target at 10:15 to renew the bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2675.75 | 2675.50 |
| …would target | 2683.00 | 2683.00 |
| Bias-down: under | 2663.50 | 2663.50 |
| …would target | 2655.50 | 2655.25 |
| Signal status: NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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)
Day-two of the bearish WedEX can’t be considered a success, other than to have produced only temporary bounces. Both Sunday night’s gap up and Monday’s late-morning rally were reversed back into negative territory.
As expected, the afternoon was also likely to probe lower, a consequence of cumulative “ineffectual optimism” beginning at Friday’s low, repeating overnight, and then Monday morning. Monday’s late low bouncing from actually filling the gap that Friday’s low missed, but it was barely filled and so its impatient buying represents another instance of ineffectual optimism.
Bouncing 16 points through the close to 2673.50 was a corollary to the low’s impatient buying, leveraged by the difficulty in generating sponsorship so late in the day. Google’s post-close earnings helped to inhibit sponsorship, too. But it’s still likely to resolve down, unless an overnight rally produces a sustainable gap up Tuesday.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.