S&P
Pre-market Tour (recording & summary)
The overnight recovery back up to 2104.00 has held, at least for a reaction down attacking 2098.00. Fitting. An opening test of 2098.00 would be predictive of the 2100.50 bias-down signal’s likelihood for triggering. But the bounce has reacted up to 2103.00. And recovering another couple of points through the open would be unlikely to trigger bias-down. Either way, even without the preliminary indication, 10 points either way is possible before this afternoon’s FOMC statement.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… More, or less.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Rejecting the overnight probe above 2124.25-2125.00 was likely to launch a downleg back to the prior low. But Tuesday’s plunge from its 2125.00 open was much more productive than that. The morning’s 2111.26 bias-down target was fulfilled, along with the prior low’s retest objective at 2105.00, and the long outstanding 2095.00 objective. The latter was probed down to support at 2091.00 where a bounce to some degree was likely — it eventually attacked 2109.00. A hold-long was indicated at the close, with a pullback limit of 2104.00. Oversold RSIs were left outstanding at the low, along with the next lower objective at 2182.00.
Overnight action’s new info…
The rally never touched 2109.00, let alone exceeded it. The 2104.00 pullback limit was tested almost immediately. The drop extended relentlessly until touching 2095.00 — and this morning’s 2094.75 bias-down signal. Choppy ranging gradually firmed, and now has surged, testing 2104.00 as resistance
If, then…
Not dipping back under 2104.00 would have enabled Tuesday’s hold-long.to reach 2111.25, then the 2115.00 and 2121.25-2122.00 areas. They could still be met, if today’s open were to reject the overnight probe under 2104.00 as yesterday’s open rejected its overnight probe above 2125.00. Otherwise, the overnight low’s retest down to oversold RSIs at yesterday’s 2091.00 low would be likely. So would an extension down to 2082.00, with room for noise down to 2077.50. Trending or any aggressive move would become more difficult as the afternoon’s FOMC statement nears. Anxiousness ahead of its likely hawkish statement, or in reaction, could be followed by a relief rally for having the event become history..
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2104.00 would be unlikely to trigger the 2100.50 bias-down signal at 10:15. Exiting the open under 2098.00 would be likely to trigger bias-down. Exiting the open above 2111.25 would be likely to trigger the 2109.50 bias-up signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2115.50 | 2109.50 |
| …would target | 2121.25 | 2115.25 |
| Bias-down: under | 2106.50 | 2100.50 |
| …would target | 2100.75 | 2094.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-market Wrap (recording & summary)
Tuesday’s close qualified as a hold-long. But I wouldn’t tolerate much of a pullback. The short-squeeze from 2091.00 up to 2103.00 eventually extended up to 2108.00, putting into play 2111.25 and higher. The 2115.00 and 2121.25-2122.00 areas could be met, too, all within the context of a temporary correction.
Temporary. Not so much because Tuesday’s drop bounced from 9 points short of the decline’s likely 2082.00 target. More so because of simultaneously oversold RSIs at the 2091.00 low requiring a retest. And that retest would be very vulnerable to extending down to 2082.00 — or its room for noise down to 2077.50.
Wednesday’s FOMC meeting may have a bullish influence, just for getting the event and the hawkish wording of its statement behind us. It’s too soon to gauge what impact Friday’s Employment Situation report may have.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Last, but not least.
Corrective bounce may be complete.
The 2095.00 target’s break puts into play one more objective at 2082.00. It’s substantially lower, so it wasn’t likely to be met in one effort. In fact, support at 2091.00 was very influential, launching a bounce to 2103.00.
Breaking under 2098.00 would resume the decline. Breaking lower is likely since the bounce leg was the first reaction up from the previous trend’s extreme, and has corrected only 50%. Also, simultaneously oversold RSIs at the low require a retest.
Currently a bounce is attacking 2102.00. Its recovery could quickly become a wildfire of short-squeezing. Regardless, retesting today’s low and resuming the decline remains likely, whether or not done today.