S&P
Post-open Review… Tough crowd.
Pre-open pullback temporarily recovers.
The gap back up to yesterday’s 2185.50 cash session close was likely to be filled, regardless of its resolution. Regardless of post-open weakness, the gap was likely to be filled, if not also probed, since yesterday’s late surge to 2186.25 had not been rejected overnight. That would still be vulnerable to reversing down.
Actually, a shallow post-open dip to 2181.50 was recovered to only touch 2185.50. That didn’t stretch the rubber band very much, and its reaction down was limited to 2-1/2 points, then recovered to fresh highs at 2186.75.
There was room for extending up to this morning’s 2179.00 bias-up signal, just as noise. Regardless of the upside potential, there has been and continues to be a greater vulnerability to reversing down.The closest thing to a requirement was to neutralize the attraction up to 2185.50. Done.
In fact, now an even bigger reaction down just touched the 2181.25 post-open low. Any lower would likely target a test of the 2177.75 bias-down signal. Exiting the bias environment back above yesterday’s 2183.50 could marginalize sellers for the day.
Pre-market Tour (recording & summary)
Overnight action is trying to represent complacency. It’s more likely anxiousness, between its fresh relative high and this afternoon’s Beige Book due. So, I’m not expecting a narrow intraday range.
The narrow overnight range had broken a little during Europe’s opens to pierce yesterday afternoon’s 2183.50 high, but that was recovered entirely up to 2186.25. Now it has broken a little lower down to 2181.25, under yesterday’s high.
Yesterday’s cash session close equates to 2185.50, and the gap back up to it will want to be filled. Filling it and then probing a fresh post-open low could serve to reverse momentum down. Sharply. Filling the gap and holding positive territory could instead rally for the morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Flat and happy.
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…
Tuesday’s open greeted the new week by surging back to Friday’s high, but holding its bias-up signal. Diving to the offsetting test of its bias-down signal formed the session low, all contained within Friday’s range. Recovering back up to the morning’s highs only ranged narrowly through the afternoon between 2180.50-2181.50. A late breakout was too late to be strong-handed sponsorship, but it extended up to 2186.25.
Overnight action’s new info…
Yesterday’s last-minute surge did not extend even a single tick higher, nor has it been rejected. But it has been retraced, although not immediately. A narrow 2-point range holding 2184.00 expanded suddenly to 3 points at Europe’s opens, dipping back down to 2182.75. Recovering back up to 2186.25 was reversed back into the range, and now back down to fresh lows at 2182.25.
If, then…
Tuesday’s lateness of its breakout doesn’t preclude extending higher, even without gapping up. But either scenario is less likely. Less likely, but still possible. However, extending much higher than a morning rally would be unlikely. And reversing back down would be likely. All of which applies to a rally attempt, which is not required, assured, or even likely. Meanwhile, having trended up into Tuesday’s close, gapping down back under Tuesday afternoon’s 2180.50 low could form a session-long decline. The setup would marginalize sellers buyers for the day, and could fill the gap at Thursday’s 2169.00 close down to 2166.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2180.50 above would be unlikely to trigger the 2177.75 bias-down signal at 10:15.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2190.25 | 2189.00 |
| …would target | 2196.75 | 2195.50 |
| Bias-down: under | 2179.00 | 2177.75 |
| …would target | 2173.75 | 2172.50 |
| Signal status: NO-BIAS | 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 afternoon’s narrow ranging between 2180.50-2181.50 finally broke out. But not until the position-squaring window had begun lapsing at 3:52. And it didn’t extend above the noon hour’s 2183.50 high until having come within 3 minutes of the cash session close. Not to mention that the narrow ranging didn’t gain any traction.
None of which precludes extending higher. Or extending higher without first gapping up. But extending higher from this base would be very vulnerable to the same rejection as prior probes of the area above. More so, extending higher without gapping up.
Gapping down deeply enough would be bearish. Having trended up into Tuesday’s close, gapping down Wednesday under Tuesday afternoon’s 2180.50 low could form a session-long decline. While that would marginalize sellers for the day, it could be contained by the gap back down to Thursday’s 2166.00 close.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.