Bias-parameters
Lessons of this morning’s bias-up.
Its magnetic attraction turned out to be ugly.
[pay]This morning’s action offers a good oppotunity to examine the limitations of the bias parameters…
Just because the 1267.75 bias-up target wasn’t met, its signal was no less valid. It was obviously influential, considering so many reversals that reacted off of it so precisely.
But 1267.75 wasn’t recovered cleanly through 10:15. And holding its support through 10:30 never produced a fresh high. Maintaining its recovery through 11:30 when the bias environment started lapsing, did not matter through noon when the environment had lapsed fully.
The bias-up target is nullified.
Cleanly recovering 1267.75 through 10:15 would have been more assured of probing fresh session highs. Extending 10:30’s recovery would have been likelier to extend higher.
Repeatedly returning to 1267.75, and not exploiting either dip down to the 1265.50 area, casts doubt on the bias-up. We already know from outstanding requirement to retest Friday’s 1261.75 low that any bounce is all about refueling sellers. The question is whether sellers are yet fully refueled.
Pessimism at the morning’s lower and lower highs still suggests a fresh high will print at some point. The next leg should either probe fresh session highs, or else probe Friday’s lows. And any bias signal triggered cleanly at 1:20 would be that much more credible.
1267.75 was neither resistance nor support, regardless of conflicting signals around it. But its continued testing – ultimately succumbing to bad news from Greek debt downgrades – provides relevant context, more so than not to have tested it at all. Its attraction may help to recover from new lows, or to prevent new highs from extending, depending upon their order.
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