Bias-parameters
Morning bias
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| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1353.50 | 1356’00 |
| …would target | 1359.50 | 1362’00 |
| Bias-down: under | 1349.25 | 1351’75 |
| …would target | 1343.75 | 1346’25 |
| Signal status: Bias-down target met | FAQ | |
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Afternoon bias
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| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1360.75 | 1363’25 |
| …would target | 1365.50 | 1368’00 |
| Bias-down: under | 1354.50 | 1357’00 |
| …would target | 1347.75 | 1350’25 |
| Signal status: No-bias, tested bias-down signal | FAQ | |
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When is a bias-up not a bias-up?
[pay]The cash session open’s drop probed ESu 1364’00 by 2-1/2 points. That could have been bullish, but its reaction bounced only to within 2 ticks of yesterday’s highs before failing. A lower low has come within 1 point of filling the gap back to yesterday’s futures close at 1360’00.
Since 1364’00 was the bias-up signal and it failed to hold after the bias-up target was met, there is now a sell signal in-play. Several factors might undermine this, such as the bias-up target having been met pre-open, and the bias-up signal still being tested at 10:15.
But until the gap back to 1360’00 is actually filled, a bounce into the 1364’00-1365’00 area is likely to reverse down to new session lows.
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Bias-up target met.
[pay]The recovery back to yesterday’s highs left S&Ps in good position for responding favorably to PPI data at 8:30. A spike up probed the ESu 1371’0 bias-up target by 1 point, where a reaction touched yesterday’s 1367’50 high. RSI on a 3-minute chart was overbought at the peak, which was also a “new Globex trend extreme,” making its retest likely.
The retest’s first attempt peaked upon retesting the 1371’00 bias-up target, and now the cash session open is retesting 1367’50 as support. That’s not low enough. I want to see something on the order of 1364’00, and then back above 1367’00 would signal a retest underway of the pre-open highs, probably targeting at least 1373’50.
Whether or not the pre-open high is retested before a deeper pullback, its retest should provide a short-entry opportunity, and possibly a substantial peak. But I’m not ready to make that call until seeing signs that the excessive optimism is unwinding.
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Morning bias
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| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1361.50 | 1364’00 |
| …would target | 1368.50 | 1371’00 |
| Bias-down: under | 1354.50 | 1357’00 |
| …would target | 1347.75 | 1350’25 |
| Signal status: still testing bias-up signal, tested Bias-up target tested | FAQ | |
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