S&P
Post-open Review… Still slow-rolling.
Gap down eventually slides.
The open gapped down to the 2171.50 bias-down signal. Fluctuating around it through the first 45 minutes invoked the grace period, just as that window was opening. Price was already sliding by 10:15. A negative knee-jerk reaction to EIA dug the knife deeper to help trigger late bias-down.
That reaction plunged to touch the 2166.00 bias-down signal. So far, it’s holding. Not reacting, but holding.
Oversold RSIs at the low would undermine a recovery attempt until retested. Back above 2170.00 would start to signal momentum reversing up, anyway, at least temporarily. But the likelier scenario is that the corrective bounce from Friday’s low has given way to a new downleg, targeting fresh lows.
Pre-market Tour (recording & summary)
I’m aware there was an issue logging into the chaRTroom this morning. I’m contacting support to confirm whether they are aware of any problem…
ADP issues a report on the Wednesday prior to Friday’s monthly Employment Situation report. Many view its data as a proxy for what to expect Friday from the government. I view the market’s reaction as an indicator of what to expect Friday from the market.
The market’s negative reaction to this morning’s weaker report suggests it doesn’t like there being an excuse to avoid a rate hike. It is counter-intuitive, but worse for the market than “bad” news is bad news hovering indefinitely over it. Should be interesting Friday.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Another narrow overnight range.
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…
A third consecutive narrow overnight range greeted Tuesday’s open, which once again resolved in immediate range expansion. Sliding through the morning touched the 2171.50 pullback limit, which was probed by 3 points into the afternoon bias environment’s exit. Although possible, collapsing was avoided by bouncing into the close, back up to the noon hour’s high. But no higher, which would have rejected the afternoon’s probe lower.
Overnight action’s new info…
Fourth time’s a charm? Yesterday’s late afternoon bounce has not extended a single tick. And another range narrower than 4 points has been fluctuating around unchanged.
If, then…
Tuesday afternoon’s low was similar to Friday afternoon’s low also being vulnerable to collapse.. Friday’s late bounce at least probed its noon hour high, and then probed higher overnight, enabling Monday morning’s rally. Last night’s ranging doesn’t reflect such eager buyers. Neither does it reflect eager sellers. Not gapping open either way this morning may leave unanswered whether yesterday’s reaction down has resumed last week’s decline, or if Friday’s bounce is going to extend higher first. But immediate range expansion would suggest at least one or the other will be attempted.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2170.00 would be likely to trigger the 2171.50 bias-down signal at 10:15. Exiting the open above 2177.00 would be unlikely to trigger bias-down. Exiting the open above 2182.00 would be likely to trigger the 2180.50 bias-up signal at 10:15.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2182.00 | 2180.50 |
| …would target | 2189.50 | 2188.00 |
| Bias-down: under | 2173.00 | 2171.50 |
| …would target | 2167.50 | 2166.00 |
| Signal status: LATE BIAS-DOWN | 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 slide into the afternoon’s bias environment exit could have collapsed from there. Touching the 2171.50 pullback limit had already produced a bounce during the morning. And the cusp between timing windows allowed new sponsorship to gain traction.
But new sponsorship did not arrive, and the market bounced into the close. The setup was similar to Friday afternoon’s low. Which makes sense, since the market is still trading off of that setup. The bounce into Monday’s high was its extension. The question now is whether the reaction down into Tuesday’s lows is about to accelerate into a new downleg, or else resume extending late Friday’s bounce.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.