Bias-parameters
Bias-down target met, and then some.
[pay]Rather than end the post-open weakness, the noon hour only accelerated it. The ESu 1273’00 area held as resistance through 10:15, so the first potential rally signal didn’t present itself until after 11:30 above 1272’00. Its test reversed down 6 points at noon, and now 14 points further at the bottom of the noon hour, touching last week’s low down to 1251’50.
The 3-minute RSI was oversold at the low, so any bounce would be likely to fail. And there is room to bounce up to 1261’50 just to correct the 24-point drop from session highs. Regardless of any bounce or its peak, simply being under the 1257’00 bias-down target through 1:20 would put into play 1244’00-1247’00. The bias-down signal would become a buy signal if recovered through 1:20.
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Afternoon bias
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| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1270 | 1271’00 |
| …would target | 1276 | 1277’00 |
| Bias-down: under | 1264 | 1265’00 |
| …would target | 1256 | 1257’00 |
| Signal status: waiting for trigger, Bias-down target met | FAQ | |
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Morning bias
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| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1264.25 | 1265’25 |
| …would target | 1269.50 | 1270’50 |
| Bias-down: under | 1257 | 1258’00 |
| …would target | 1251.50 | 1252’50 |
| Signal status: Bias-up target | FAQ | |
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Bias-down target met, too.
[pay]RSI had continued diverging negatively while the ESu 1271’00 bias-up target was being probed by nearly 3 points, but the cash session’s open found sellers ready to go. A hesitation at the 1269’25 sell signal resolved down, and sellers slowed again upon testing the 1266’25 bias-up signal as support. Eventually the 1257’00 bias-down target was probed by more than 1 point. Ultimately a lower low reached 1251’75.
Currently S&Ps are sitting right back at 1263’50 where the Employment report was greeted. As I have said a couple of times (so far) this morning in the charting room, while this shortened session might be more volatile than some weeks, it might end less changed than some weekends.
The recovery attempt probably won’t stop here, and is next target is 1268’00 so long as 1261’00 holds as support. Another sell-off would target a retest of the low which was accompanied by oversold 3-min RSI. That scenario would have bullish potential, because it could resolve unfinished business below, while leaving the gap back to today’s 1272’25 for attracting price higher next week. By the same token, holding a test of 1272’25 today would be bearish.
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Bias-up target met.
[pay]Selling before the Employment report took S&Ps down to new lows at ESu 1259’75 before recovering back to the 1263’50 area. The knee-jerk reactions – there were two – ranged 9 points between 1260’50-1269’50. Eventually S&Ps climbed higher to probe the 1271’00 bias-up target by 2 ticks where the 3-min RSI became overbought to indicate that any pullback would be recovered.
In fact, a 6-point dip from there has been recovered and probed up to 1272’50. Now RSI is not overbought, creating a negative divergence. Additionally, the interim consolidation between the highs was sloped upward. This tends to reflect too much optimism for the high’s retest to extend up.
This potential bearishness must still be triggered by retracing back under 1269’25. Otherwise the next higher target is 1277’00.
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