Bias-parameters
Afternoon bias
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| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1291.50 | 1291’50 |
| …would target | 1295.75 | 1295’75 |
| Bias-down: under | 1285.25 | 1285’25 |
| …would target | 1280 | 1280’00 |
| Signal status: No-bias, both Bias signals tested | FAQ | |
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Bias-down target met.
[pay]This morning’s drop is not what the doctor ordered. Actually, it is an alternative treatment strategy. The symptoms were a runaway rally accompanied by relatively light volume and a deep hacking cough. The cough turns out to be related to a recent trip to Guam (long story), but the low-volume rally was more serious and didn’t respond to antibiotics.
Either the three-day holiday seasonal bullishness was going into hyper-drive, or else its effect was inverting. Either the rally was preparing to extend 2-3 dozen points further, or else the evaporating liquidity was going to smack down prices. I found it bullish near-term, i.e. the first of each two choices, that yesterday’s close recovered above prior highs. The morning’s last-minute breakout wasn’t at all endearing, but that wasn’t a deal-killer in a low volume environment.
Well, something was. The late bias-down signal extended to its 1287’50 target was probed by nearly 1 point before bouncing back up to 1289’50. A retest of the low would either hold for the day, or else break lower targeting 1280’00.
The potential drop’s payoff probably merits for most traders entering short on a new low, with a stop back above 1289’00 – perhaps a stop-and-reverse. If the bounce first extends up to 1291’50, then falling back under 1289’50 would simply put into play 1280’00. Closing above 1291’50 would start to be bullish.
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Bias signal going into overtime.
[pay]The 1293’50 bias-down signal was still being tested at the 10:15 timing window. This invokes the 15-minute grace period. So at 10:30, sellers need to have proved they needed the extra time to take control. In addition to the bias-down signal, the first half-hour’s 1292’00 low should also be broken.
Otherwise, still testing the signal or trading any higher at 10:30 would be a No-bias environment. By the way, a late No-bias signal doesn’t have the same requirement for testing the bias signal that wasn’t already tested.
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Morning bias
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| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1301 | 1301’00 |
| …would target | 1307 | 1307’00 |
| Bias-down: under | 1293.50 | 1293’50 |
| …would target | 1287.50 | 1287’50 |
| Signal status: late Bias-down signal | FAQ | |
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Afternoon bias
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| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1297 | 1297’00 |
| …would target | 1303 | 1303’00 |
| Bias-down: under | 1292.25 | 1292’25 |
| …would target | 1286.75 | 1286’75 |
| Signal status: No-bias, touched Bias-up signal | FAQ | |
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