Posts by Rod David
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2750.50 | 2750.50 |
| …would target | 2756.75 | 2757.00 |
| Bias-down: under | 2740.75 | 2741.00 |
| …would target | 2735.00 | 2735.00 |
| Signal status: LATE BIAS-UP | 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… Scratching out a low.
Post-open extends the overnight recovery.
The inverted Head & Shoulders pattern that had developed overnight ultimately held its 2746.00 shoulder. The open was greeted by probing 2 points above the 2754.25 neckline, and the opening bar added 2 more points.
The opening 15 minutes of volatility trended back down, which is not optimal for an Isolation setup. It still gets a benefit of the doubt, so long as negative territory is still avoided this morning. And continuing to fulfill the setup would continue to make this afternoon likely to rally.
I’m giving the Isolation setup a benefit of the doubt, despite its open not being optimal, because the open’s dip maintained its recovery above yesterday’s lows, especially its optimal 2749.75 support level. The next 15 minutes extended to a fresh high at 2762.00, and its reaction down held the 2755.75 bias-up signal in time to trigger.
None of which prevents a deeper post-open dip down to 2744.50-2746.00. RSIs aren’t improving, and multiple attempts to resume the recovery are each being met with multi-point reactions down. A detour is possible, even if we knew with complete certainty the bias-up and Isolation setups will be fulfilled. Otherwise, reacting down too deeply would invalidate a recovery, and next target 2729.00 below.
The First Trade & Pre-open Tour Recording… You know this pattern.
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…
Tuesday’s drop was not immediate, but its delay was brief and its resolve was relentless. Monday’s rally can be characterized similarly. Optimism ahead of the new Fed Chair’s first ever congressional testimony had been largely discounted. Tuesday’s outside day finished the discounting early by adding 9-1/2 points above Monday’s cash session high up to 2789.75. Did it also overly-compensate by eventually probing 9-1/2 points under Monday’s low down to 2743.50?
Overnight action’s new info…
That over-compensation shrank before it got wider. And then it shrank again. Firming to 2754.50 was rejected by a dip to fresh lows at 2738.50. Recovering steadily through midnight persisted into and out of Europe’s opens until touching the earlier high. Now its reaction down to 2746.00 has formed an inverted Head & Shoulders pattern.
If, then…
Yesterday’s dip had been consolidating at or above its lowest projected support at 2749.75, until coming to within 3 minutes of the cash session close. A last-minute dip contains the session’s lower lows, which tested “lower prior highs” at 2743.00 through the futures close. Both of these relevant levels have yet to be broken during a relevant intraday timing window. Which would likely extend yesterday’s downtrend through this morning. Otherwise, maintaining an open above yesterday’s lows — then extending it through the open — could form an Isolation pattern to reinstate another multi-session rally. Meanwhile, the overnight Head & Shoulders influence must be obvious during that same initial 15 minutes of volatility to be influential intraday. This is equally true for any overnight pattern’s influence, and a Head & Shoulders pattern’s influence can be bullish or bearish, with specific measurements targeted in either direction. And extending down to the lower targets would be in-line with the 1987-style crash template that’s still tracking.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2753.25 would be unlikely to trigger the 2755.75 bias-up signal at 10:15. Exiting the open under 2740.75 would be likely to trigger the 2744.50 bias-down signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2756.00 | 2755.75 |
| …would target | 2764.00 | 2764.00 |
| Bias-down: under | 2744.50 | 2744.50 |
| …would target | 2734.75 | 2734.50 |
| Signal status: BIAS-UP | 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)
Optimism ahead of the new Fed Chair’s first ever congressional testimony proved to have been discounted already. Monday and Tuesday’s sessions bookend-ed each other, one trending up and the other trending down. They even shared similar characteristics:
Monday’s 2759.50 open was reversed temporarily by the first hour’s dip back down to 2753.00 before rallying sharply to 2795.00 through its close. Tuesday’s 2782.00 open was reversed temporarily by the first hour’s surge up to 2790.00 before sliding sharply to 2743.00 through its close. Both sessions even tried to trigger a very late and unreliable reversal signal, only to extend the intraday trend.
Inverse characteristics are also similar characteristics. If both sessions are influenced by the same sponsorship, then Tuesday’s trending attempt won’t extend the next day, either. Which would make Wednesday more likely to range — albeit a wide range, but without a directional resolution.
How will we know, as early as possible? Since 2743.00 was the next “lower prior high” and its test held, opening Wednesday back above 2753.25 and 2757.00 would be increasingly likely to have absorbed Tuesday’s drop. Back above 2766.00 and 2771.50 would help to confirm. An attack on Monday-Tuesday highs wouldn’t be required, but likely. Otherwise, not already recovering through the open would be vulnerable to extending Tuesday’s drop sharply and deeply, potentially fulfilling the 1987-crash style template.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- Monitor overnight Globex trading in the chaRTroom here.