Bias-parameters
Morning bias
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| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 868.50 | 871’00 |
| …would target | 872.50 | 875’00 |
| Bias-down: under | 861 | 863’50 |
| …would target | 853 | 855’50 |
| Signal status: waiting for trigger | FAQ | |
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No-bias, and how that could trigger a drop.
[pay]The afternoon’s 870’00 bias-up signal was tested thoroughly as resistance coming out of the noon hour. I noted in the chartroom that RSI was alternately under-performing and deteriorating. A small spike down before 1:20 attacked 868’00 through 1:30, and also triggered no-bias.
Holding a test of one bias signal (actually piercing it but not recovering it through the relevant timing window) makes a test of the other bias signal likely. So a test of this afternoon’s 863’25 bias-down signal became likely. In fact, the signal was just tested within 1 tick, on the heels of a steep decline, making a hesitation or bounce likely.
If that hesitation or bounce resolves down to break under 865’50, then it puts into play a test of 859’00 that still requires a retest. And probably much lower as compensation for having delayed its required retest.
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Afternoon bias
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| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 867.75 | 870’00 |
| …would target | 872.75 | 875’00 |
| Bias-down: under | 861 | 863’25 |
| …would target | 856.25 | 858’50 |
| Signal status: waiting for trigger | FAQ | |
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Fulfilling the bias-down.
[pay]The 871’25 bias-up signal’s retest did hold, as did the 870’50 bounce limit after dipping back under 870’00. And the break under 870’00 went on to fulfill its 865’50 target which is being tested ahead of the noon hour.
A break maintained under 865’50 would put into play a retest of this morning’s 859’00 low. The retest is already required because the bounce originated during a bias-down environment. The extension into positive territory is a delay of this objective, for which the market should compensate with either a steeper or deeper decline.
If today’s close is under this morning’s low, after a gap down’s recovery into positive territory failed to hold, the resulting setup is a “pivot reversal” that points down without delay. Otherwise, thanks to the probe into positive territory, a close above 873’50 is the minimum requirement to signal the rally is extending substantially higher before resuming the decline.
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Bias-down rally, and all that that entails.
[pay]The 863’50 bias-down signal was broken as support through 10:15. This inhibits bounces, but it doesn’t prevent them. And bounces it doesn’t prevent are doomed to failure. Recovering the bias-down signal through 10:30 would have invalidated the bias-down signal, so much as to make it a buy signal. But the signal wasn’t recovered by then.
However, the signal was recovered afterward, and its follow-through touched the 871’25 bias-up signal as resistance. That was 15 minutes ago, and the market still ranges here narrowly.
The bias-down signal says the bounce will be retraced back to its (859’00) origin – any bounce, however high and for however long. Back under 870’00 would be the first attempt so long as bounces then hold 870’50, initially targeting 865’50, whose break would target 859’00 – and probably lower to compensate for the delay.
If 873’50 is recovered going into or coming out of the noon hour, then a much bigger rally effort would be underway, putting off the retracement back to this morning’s lows.
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