Posts by Rod David
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2640.75 | 2641.75 |
| …would target | 2649.75 | 2651.00 |
| Bias-down: under | 2625.00 | 2626.25 |
| …would target | 2617.50 | 2618.50 |
| Signal status: NO-BIAS | 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… Hunkering back down.
Recovery extends, until defensive posturing resumes.
The overnight recovery to 2649.00 had been retraced to 2634.00 before the Employment Situation report.
Its reaction attacked 2649.00 to within 1 tick, then greeted the open 10 points lower. The open surged from there until testing the 2656.00 bias-down signal as resistance.
And since testing the 2656.00 bias-down signal as resistance, the market has dropped from there.
The 2647.25 bias-down target was still being tested as support at 10:15, so bias-down wasn’t renewed. But it’s still a bias-down environment, now probing 4 points under the 2634.00 area where the Employment Situation report was greeted.
Nothing requires this morning’s drop to extend, or precludes it from closing back above 2644.00. But closing under 2644.00 is still likely to be by a wide margin, and then also likely to extend into Monday’s open. While buyers aren’t marginalized in this pattern and could still retake control, I suspect they won’t.
Recovering back above 2647.25 through a relevant timing window would help the bullish scenario — especially if recovered after the reaction China’s retaliation has been absorbed.
The First Trade & Pre-open Tour Recording… Fool me twice?
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 had rallied through Europe’s opens to attack 2668.00. Reacting down to 2552.00 defined the balance of price action overnight, and through Thursday’s close. The sideways session’s only expressions of sentiment were separate rallies to 2672.00, and their two reactions down. The separate rallies each failed to extend, while their reactions down fulfilled targets. Bouncing off of the targets formed “V” bottoms that never paused to allow any accumulative behavior. Fluctuating around 2660.00 resistance was ongoing into the close, undermining whether a next higher objective was put into play.
Overnight action’s new info…
Markets are usually constrained ahead of an Employment Situation report. Last night’s Globex started that way. It had barely begun trading, and could barely be characterized as trending, when it got ambushed by a $100 million tariff on China. Plunging 40 points within 15 minutes fell to 2620.00. Reacting up to 2637.50 into and out of midnight formed an Ascending Triangle. Already breaking higher to 2644.00 ahead of Europe’s opens has extended to attack 2649.00. Its reaction has fallen back down to the triangle’s 2637.50 upper-end as support, probably sparked by headlines that China is within 1-2 hours of announcing its retaliation.
If, then…
Will Thursday night’s plunge set a pessimistic tone for the day, or will its excessive pessimism prove bullish from a contrarian perspective? Tuesday night’s 57-point slide scared a lot of market participants, yet it was reversed well above its origin intraday Wednesday. Will that pattern repeat today? The influence of Friday Factors on sizable overnight moves tends to exacerbate them as weekend illiquidity fast approaches. The question is whether that influence will be applied to the overnight drop, or to a post-open recovery attempt. Meanwhile, Wednesday closed barely under 2644.00 and Thursday closed barely above 2660.00. Closing back under both on Thursday would have signaled the trend reversing down. That applies equally on Friday. The overnight plunge to 2620.00 seems to make that easier, but so did Tuesday night’s 57-point slide. Anyway, closing under 2644.00 or above 2660.00 would likely be by a wide margin.
First Trade…
[Click here to view the Bias parameters] No preliminary levels are considered ahead of an Employment Situation report.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2668.00 | 2668.50 |
| …would target | 2676.00 | 2676.50 |
| Bias-down: under | 2655.50 | 2656.00 |
| …would target | 2646.75 | 2647.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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.
Market Wrap (recording & summary)
We didn’t know it at the time, but Thursday’s session was largely over before midnight Wednesday. 2660.00 resistance was being tested then, and it has been the center of a 20-point range since then. The afternoon’s 2550.00 bias-down target defined its lower-end, and the morning’s 2672.00 high held a retest during the final hour.
If there’s any sentiment to consider from a contrarian perspective, it would be the afternoon’s two dips. Both reversed back up almost precisely from their targets, where selling pressure was satisfied. But the “V” bottoms that formed do not reflect accumulation. Rather, that’s impatient buying, which is potentially bearish from a contrarian perspective.
Regardless of the knee-jerk reaction to Friday’s Employment Situation report, trending through the opening 15 minutes of volatility would be likely to extend in that direction. Friday Factors keep the door open to resolving in either direction.Otherwise, not decisively closing above 2660.00 Thursday undermines the next higher objective at 2722.00. And closing back under 2644.00 would be likely to trend down out of the weekend, too.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- Monitor overnight Globex trading in the chaRTroom here.