Bias-parameters
Bias-up target met.
[pay]This morning’s bias-down signal started lapsing at 11:30. Despite retesting the ESu 1334’00 bias-down signal as support – probing it with a new low – the noon hour was entered back above the bias-down signal. This alone indicated that sellers had lost traction. Buyers exploited the setup and drove S&Ps back up to the 1343’00 bias-up target for its fifth test today.
Is it so amazing that buyers were able to squeeze in another round-trip? Or isn’t it less amazing the more often this is done? I am happy to accept that the lows have been probed sufficiently to allow a durable bottom to form. I am uncomfortable with the continued willingness of buyers to step in front of these probes of lower lows before more serious testing could be done. The recoveries are less amazing for that, as well.
But that wouldn’t inhibit me from being long above 1343’00 through any relevant timing window. My eyes would be wide-open to the possibility of the strength being only a momentary “head-fake.” That’s what a stop-and-reverse is for.
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Afternoon bias
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| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1336 | 1338’50 |
| …would target | 1341.50 | 1343’00 |
| Bias-down: under | 1331.50 | 1334’00 |
| …would target | 1326.75 | 1329’25 |
| Signal status: waiting for trigger, Bias-up target met | FAQ | |
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Bias-up target met. Bias-down nearly signaled.
[pay]New lows overnight touched the ESu 1334’00 bias-down signal after an earlier surge had tested the 1338’75 bias-up signal. A return to the bias-up signal was more productive, reaching the 1343’00 bias-up target. The situation since then has been quite fluid, with another round-trip between bias-up signal and target and back again.
The bias-down signal was just retested in reaction to the LEI report at 10:00. Indeed, last week’s 1333’00 low was nearly touched but for 1 tick’s difference. That was enough to produce a nearly 5-point bounce, more evidence that optimism is alive and well, and preventing the market from forming a durable bottom. The prior low should actually be probed so that a recovery can be meaningful, closing back above the decline’s 1337’50 target, and preferably above 1442’50.
The bias-up target was met, so triggering no-bias at 10:15 would be a sell signal. The market is actually threatening to trigger the 1334’00 bias-down, which would be even more bearish for having triggered after fulfilling the bias-up target.
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Morning bias
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| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1336.25 | 1338’75 |
| …would target | 1340.50 | 1343’00 |
| Bias-down: under | 1331.50 | 1334’00 |
| …would target | 1327.25 | 1329’75 |
| Signal status: No-bias, Bias-up target met, tested Bias-down signal | FAQ | |
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Afternoon bias
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| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1346 | 1348’50 |
| …would target | 1352.25 | 1354’75 |
| Bias-down: under | 1340.75 | 1343’25 |
| …would target | 1332.50 | 1335’00 |
| Signal status: Bias-down target met | FAQ | |
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