Posts by Rod David
Post-open Review… Not down, not out.
Overnight low’s retest is retraced.
The first tick was essentially flat but that was followed immediately by a spike down to 2261.50. Its consolidation through the first 15 minutes — and through the first half-hour — held yesterday’s 2263.50 lows as resistance. The isolation setup failed. So did any attempt to reject the open’s probe under yesterday’s lows.
That’s bearish.
Another spike down during the first half-hour of 4-1/2 points touched the 2259.50 overnight low. Recovering it almost entirely in time to invoke the grace period barely recovered the 2263.00 bias-down signal in time to avoid triggering bias-down.
That’s bullish.
Now a surge has touched fresh post-open highs at 2266.00. Which would certainly seem bullish. One problem, though, and it’s the same problem that plagued yesterday’s recovery attempts — too late. Like yesterday’s blip-up just AFTER entering the final hour, and a small surge just AFTER the proxy window had closed. This surge originated just AFTER 10:30, when a fresh post-open high would have been optimal.
That’s mixed signals.
Probing under the 2263.00 area as the bias environment begins lapsing would reject the late signal. It would also be credible for resuming yesterday’s opening break that today’s open tried to resume. Nothing can reinstate this morning’s potentially bullish scenarios, but exiting the bias environment above 2268.00 would undermine the bearish scenario.
Pre-market Tour (recording & summary)
The bullish isolation setup is still forming, and must avoid probing under yesterday’s 2263.50 low. Preferably, entirely. Otherwise, immediately rejecting a quick dip.
If not exploited, a setup becomes as bearish as it would have been bullish (and vice-versa). Fulfilling the isolation setup would target new highs, albeit only 13-14 points higher. Rejecting the setup instead would reinforce Monday’s gap down, which otherwise spent the day like a deer in the headlights.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Isolated sellers?
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Monday gapped down to the 2268.25 target of Friday’s late sell signal. That also tested “lower prior highs” from Wednesday and Thursday. And ultimately after touching 2263.50, the morning’s 2265.50 bias-down signal held. But the reaction stopped short of filling the gap back up to Friday’s 2271.25 close. Such pessimism persisted through the session, without producing a break lower. The morning’s 2275.50 objective was left outstanding.
Overnight action’s new info…
Monday’s late dip to fresh afternoon lows at 2264.00-2265.00 barely delayed extended much lower. First dipping to 2262.00 was consolidated, and then extended to 2259.50 soon after midnight. But a steep rally greeted Europe’s opens at 2266.00. A quick reaction down attacked 2262.00 and soon recovered entirely.
If, then…
Of two or three bullish templates at this stage, overnight action is tracking one — isolation. Probing a fresh low overnight can be isolated by maintaining an open back above Monday’s lows. The minimum reward for this setup would be to probe above Friday’s 2277.00 high. Now that fresh lows have been probed overnight, also rejecting a fresh post-open low could reverse momentum up intraday. Regardless, not exploiting either bullish setup this morning would reinforce Monday’s break. And that would essentially point down into Wednesday morning, or longer, to 2247.00 or 2235.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2266.00 would be unlikely to trigger the 2263.00 bias-down signal at 10:15. Exiting the open under 2268.50 would be unlikely to trigger the 2271.50 bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2276.75 | 2271.50 |
| …would target | 2280.75 | 2275.50 |
| Bias-down: under | 2268.25 | 2263.00 |
| …would target | 2262.75 | 2257.50 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| 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)
Two pessimistic observations became three late Monday afternoon. First, the morning’s bounce had stopped pessimistically short of filling the gap back to Friday’s close. Next, two timing windows ranged flat-to-lower without actually breaking. Then, they did break lower, but several minutes before appropriate.
Pessimism, potentially bullish from a contrarian perspective. Unless exploited through a relevant timing window. Which Monday’s close tried to do, but failed — attacking the morning’s low to within 1 tick, but not probing lower.
A contrarian bullish template could still exploit the pessimism in one of two or three ways. Either by isolating a fresh low to the overnight that opens Tuesday back above Monday’s lows, or by gapping up above Monday’s highs. Quickly rejecting a post-open probe of fresh lows is also possible, but not likely.
A rally’s objectives would be Monday morning’s 2275.50 “unfinished business above,” and a new trend high close.
Otherwise, any other template essentially points down into Wednesday morning. Some point lower for longer. But any downdraft here is still considered to be only temporary.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.