Bias-parameters
Morning bias
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| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1274.75 | 1274’75 |
| …would target | 1279.50 | 1279’50 |
| Bias-down: under | 1267.25 | 1267’25 |
| …would target | 1260.50 | 1260’50 |
| Signal status: No-bias, tested Bias-up signal | FAQ | |
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Bias or No-bias, that is the question.
[pay]Afternoon events that can wreak havoc on price action also tend to influence timing windows. That’s the case today apparently. This morning’s late break higher to within 1 tick of the bias-up target was a late-break higher nonetheless. The timing undermined the break’s durability, so now S&Ps are struggling to remain in positive territory after probing the bias-down signal after 1:20.
It’s too late for serious trending with the FOMC news item just minutes away. I’ll probably get bullish if the reaction recovers above 1272’00 without acting toppy. But I’m otherwise ready to short a brief favorable reaction or a negative reaction that extends too far and/or too long to recovery.
The bigger picture is still more likely to retest recent lows, probe them, and break lower into a new downleg. Closing today above this morning’s high would make me suspect the opposite, that a bullish scenario was unfolding.
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Afternoon bias
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| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1272.50 | 1272’50 |
| …would target | 1276.50 | 1276’50 |
| Bias-down: under | 1267.25 | 1267’25 |
| …would target | 1260.50 | 1260’50 |
| Signal status: No-bias | FAQ | |
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Probing overnight highs and the bias-up.
[pay]The cash session’s open emulated the pre-open price action that had bounced up to 1268’00. But a 5-point drop was easily absorbed by a bounce that emulated the overnight test of the 1278’50 bias-up signal. The reaction to 10:00’s econ reports surged higher still.
The blip-up’s blaap-down needed to fall back under 1268’00 if sellers were regaining control. So far that has held as support, while the blip-up’s high has been retested.
MACD & RSI haven’t confirmed the highs – the bias-up signal can trigger at 10:15 above 1270’50, but its follow-through to the 1276’00 bias-up target would all but require being retraced entirely, perhaps in reaction to this afternoon’s FOMC minutes.
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Both bias signals tested.
[pay]Monday’s break wasn’t enough to force immediately lower prices, but it was enough to undermine any rally attempt. An overnight rally tested the 1270’50 bias-up signal before falling sharply to test the 1264’00 bias-down signal, each by 2 ticks. A recovery back to session highs took longer before failing, so its fall reached 1262’50.
Now a bounce is testing 1267’25. Back under 1265’00 would target 1260’50-1262’00 to retest the lows. Last week’s behavior at these levels might lure in buyers expecting another rally to begin. But we’ll be looking for the 1259’00 bias-down target, which might be 2 points too high.
If 1267’25 doesn’t hold this test as resistance, the market might be waiting for the econ reports due at 10:00 before reacting. No doubt they’ll be influential, but their timing might instead coincide with the morning’s low.
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