S&P
The First Trade… Giving back.
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…
Friday’s 7-point gap up to 1894.50 extended back to and through Wednesday’s 1910.00 high to fulfill the corrective rally’s 1913.00 attraction by noon. That was extended through the afternoon’s bias environment exit to fulfill potential up to 1924.00. The position-squaring window ended with a surge up to 1933.00.
Overnight action’s new info…
Sunday night’s firm open only attacked Friday’s high before drifting back down to 1922.50. Ranging back up to 1830.00 resolved down through Europe’s opens down to 1917.50. Another bounce’s failure is now probing fresh lows down to 1916.50.
If, then…
Despite producing a breakout close above resistance, the rally has gotten suspicious. Friday afternoon’s buyers didn’t gain traction through relevant timing windows. The first close above a multi-session range was a breakout, but Friday breakouts often aren’t confirmed by a second consecutive higher close on Mondays. And Friday’s close above 1924.00 was produced by a leg that originated too late to be reliable. Not holding 1913.00 would undermine the interim extension to 1924.00, if not also reverse the recovery.
First Trade…
Exiting the open at 9:45 above 1924.00 would be unlikely to trigger the 1922.00 bias-down signal at 10:15. Exiting the open under 1919.00 would be likely to trigger bias-down. Exiting the open under 1913.00 would be unlikely to recover the 1916.50 bias-down target in time to avoid renewing the bias-down signal.
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Post-market Wrap (recording & summary)
The 1913.00 objective was met early, but not rejected, so the rally extended. The next higher objective at 1924.00 was met late, but not rejected, so the rally extended. Closing above 1924.00 would put into play much higher objectives.
The breakout leg originated late and wasn’t complex, so it requires confirmation as much as any other trigger. The alternative doesn’t necessarily resume the decline, at least not immediately. I’ll describe the likely possible paths during this weekend’s Saturday Review.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1939.00 | 1932.25 |
| …would target | 1944.50 | 1937.75 |
| Bias-down: under | 1928.75 | 1922.00 |
| …would target | 1923.25 | 1916.50 |
| Signal status: LATE BIAS-DOW, BIAS-DOWN 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.
Pre-close View… Got there, too.
Extended target met. And held.
The corrective rally’s 1913.00 objective was never “unfinished business” that required being tested. But its test was likely anyway, so long as no interim reaction down gained traction.
No interim reaction down gained traction.
The same description can be applied to 1924.00. While not required to be met, its test would be likely so long as testing 1913.00 wasn’t reversed.
Testing 1913.00 wasn’t reversed.
Now 1924.00 has been touched. It was tested AFTER the bias environment began lapsing. Its reaction down retraced that entry BEFORE the final hour was entered. That’s isolation.
And it’s potentially reversing momentum down. Unless fresh highs are probed through the 3:10-3:20 timing window, the final hour is now vulnerable to reversing down to 1909.00 and 1906.00.