Bias-parameters
Morning bias
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| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1281.50 | 1283’00 |
| …would target | 1287.50 | 1289’00 |
| Bias-down: under | 1274.50 | 1276’00 |
| …would target | 1268.50 | 1270’00 |
| Signal status: No-bias, tested both signals | FAQ | |
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Bias-down target met. But wait, there’s more…
[pay]A late break under the ESu 1279’50 bias-down signal quickly dropped to its 1275’50 target, where S&Ps ranged sideways through the 1:20 timing window. Obviously buyers are not in control, and that was a big part of the bullish potential: that yesterday’s selling had overdone things, and that a gentle push upward this morning would entice some of yesterday’s sellers to buy back in before the weekend.
Now the closest thing to a buy setup would be to recover back above 1277’25 after a brief retest of the 1275’50 low (its retest is required because 3-min RSI was oversold at the low). Back above 1280’00 would confirm that momentum had reversed up, opening the door once again to an afternoon short-squeeze.
But I cannot stress enough my disappointment in buyers for not exploiting this morning’s firm open. Admittedly, the setup could go either way, coinciding with a steep decline and impending weekend illiquidity – indeed, this is why today is likely to gain a lot of ground, or else lose a lot. So I wouldn’t give long positions much time or room to perform, and would be a seller under 1274’50 with a stop-and-reverse to long above 1277’50.
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Afternoon bias
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| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1286.50 | 1288’00 |
| …would target | 1293 | 1294’50 |
| Bias-down: under | 1278 | 1279’50 |
| …would target | 1274 | 1275’50 |
| Signal status: Bias-down target met | FAQ | |
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No-bias, and that’s the bullish scenario.
[pay]The bias-up signal was still being tested at the 10:15 timing window, allowing buyers a 15-minute grace period to advance things along. But S&Ps have only ranged since then about 2 points either way around ESu 1288’00-1289’00. Buyers have more work to do building a base if they intent to rally this afternoon. And they had better rally, because to stand still here would be to fall behind, attracting new sellers if buyers appear to be weak.
If buyers do get their act together today, then we’ll start focusing on whether the session can close above this morning’s 1291’00 high. After gapping up in a downtrend, and then recovering from another dip to new trend lows, closing above this morning’s highs would form a Pivot Reversal session triggering a rally lasting several days.
But first things first. The 1282’00 bias-down signal is being retested, threatening a retest of this morning’s 1280’25 low, the 1276’00 overnight low and possibly even the 1275’50 bias-down target. A no-bias environment is the best time for a rally to satisfy sellers, but that’s risky at trend lows after a big session loss with the weekend’s illiquidity just hours away.
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Morning bias
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| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1287.50 | 1289’00 |
| …would target | 1294.75 | 1296’00 |
| Bias-down: under | 1280.50 | 1282’00 |
| …would target | 1274.25 | 1275’50 |
| Signal status: Still testing Bias-up signal, tested Bias-down signal | FAQ | |
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