Bias-parameters
Afternoon bias
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| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1273.75 | 1275’00 |
| …would target | 1279.25 | 1280’50 |
| Bias-down: under | 1266 | 1267’27 |
| …would target | 1256 | 1257’25 |
| Signal status: Still testing Bias-down signal | FAQ | |
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Bias-down target met.
[pay]The selling didn’t start until well after midnight, but made up for lost time. The retracement back to Monday’s close took one character as S&Ps dropped 7 points in 3 hours, from ESu 1286’50 down to the 1279’00 bias-down signal. Then price action became distinguished by a suddenly steeper rate of descent. Another 13 points was shed during the next 90 minutes, probing the 1269’00 bias-down target by more than 3 points.
The past 90 minutes have ranged nearly 5 points, and just threatened to resume the decline. But a brief plunge from the range’s upper-end stopped short of even touching the lows, which is a little too much optimism to believe a low is forming.
Back under 1266’25 would signal the decline has already resumed, probably targeting the 1257’00 area. Otherwise, there is room for a bounce back up to 1273’00 first, although it wouldn’t be signaled before recovering 1270’00.
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Morning bias
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| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1287.50 | 1289’00 |
| …would target | 1294 | 1295’50 |
| Bias-down: under | 1277.50 | 1279’00 |
| …would target | 1267.50 | 1269’00 |
| Signal status: Bias-down target met overnight | FAQ | |
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Afternoon bias
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| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1289.50 | 1291’00 |
| …would target | 1295.50 | 1297’00 |
| Bias-down: under | 1283.50 | 1285’00 |
| …would target | 1278 | 1279’50 |
| Signal status: No-bias | FAQ | |
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Not a bias-up… for now.
[pay]Relative to Friday’s range, the limited overnight range had already suggested volatility would be late coming into work this morning. Friday afternoon’s highs around ESu 1285’00 held a test as resistance and the 1276’00 bias-down signal held as support. S&Ps eventually levitated back up to the 1283’00 bias-up signal, but too late to trigger a rally.
I’m a little surprised that buyers didn’t take more control. S&Ps hovered just under Friday’s highs long enough to reflect pessimism, but a momentary probe higher was rejected by a 10-point drop. Now Friday’s highs are being retested as resistance, and stopping the rally here would still surprise me.
The only sticking point is timing. If buyers can be patient and slow-play their strength, chipping away at resistance until the no-bias environment begins to lapse, then the 1289’00 bias-up target would be an understatement. Rallying too soon would reflect impatient buyers, allow the buying pressure to be absorbed more easily.
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