S&P
Post-open Review… Late is the new timely.
Delayed recovery of resistance nevertheless extends higher.
Recovering (or not) 1943.00 through the open could have been predictive of the morning. It was tested and probed pre-open. The open pierced it only momentarily. And then a reaction down tested 1938.50.
And retested it. Meanwhile, 1943.00 wasn’t recovered through the open. But was testing and retesting 1938.50 a sufficient offset?
We discussed that question in the chaRTroom while leaving the door open to a buy signal. It triggered above 1943.75. Bias-up triggered easily, and despite holding the 1946.00 bias-up target’s test through 10:15, a surge just touched yesterday morning’s 1956.00 high.
Reversing down from here would leave no “unfinished business above” to prevent extending a downleg. Reversing down from here would be signaled by exiting the morning’s bias environment back under its 1946.00 bias-up target.
Meanwhile, a pullback has room down to 1951.00. Not reversing down would be likely to accomplish what yesterday morning’s late weak-handed rally did not — retesting Friday’s 1968.75 pre-open high.
Pre-market Tour (recording & summary)
Pre-open action continues to fluctuate around 1943.00, whose recovery (or not) through the open should be predictive of the balance of the morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… But wait, there’s more.
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…
Recovering an overnight dip down to 1928.00 enabled a relatively flat open around 1946.00. Extending 10 points higher probed Friday’s range up to 1956.00 Despite starting a little late to be durable, the rest of Friday’s range could have been retraced, too. Never mind that, an afternoon slide fell back down to overnight lows, gaining traction for its effort.
Overnight action’s new info…
Lower lows soon came within 3 ticks of critical support at 1920.00. But the balance of the night has rallied, eventually testing yesterday’s open around 1946.00. Its reaction down has recovered to momentarily attack 1948.00.
If, then…
I gave yesterday morning’s late rally too much credibility for being able to extend through 1952.00-1953.00. The afternoon slide earned more credibility than I had given it, not only fulfilling its potential to retest 1933.00, but then also retesting 1930.00. Now the overnight rally is threatening that credibility. Much can happen in this pattern before the open. But just gapping up above 1943.00 could negate rewarding yesterday afternoon’s sellers with control of this morning’s bias environment. Gapping up above 1951.00 would be the optimal rejection, targeting a retest of 1969.00.
First Trade…
Exiting the open at 9:45 above 1948.00 would be likely also to exceed the 1946.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 1944.00 would be likely to trigger the 1940.25 bias-up signal at 10:15. Exiting the open under 1937.75 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1943.75 | 1940.25 |
| …would target | 1949.50 | 1946.00 |
| Bias-down: under | 1932.00 | 1928.50 |
| …would target | 1926.75 | 1923.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
Monday afternoon’s decline gained traction for its effort. The bias environment was exited under the noon hour’s low, and the final hour was entered under the bias environment’s low. Tuesday morning should reward sellers with probing lower — and not only momentarily. That reward can be delayed until the afternoon.
None of Friday’s range requires being tested, no matter how much likelier that had become Monday morning. But it was a mistake to give the late-morning rally too much credibility. Not actually a mistake, since it held the bias-up signal’s resistance. But the late-morning rally did not earn any reward.
Negating Monday afternoon’s drop would all but require gapping up Tuesday above Monday afternoon’s 1951.00 bias environment high. Gapping up above the afternoon’s 1943.00 bias environment exit would be a contender.
It’s entirely possible that the retest of Feb 1’s high has completed, and that the trend is reversing down. Momentum shouldn’t delay being obvious, unless any further dipping is only delaying a retest of Friday’s highs.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.