S&P
Post-open Review… Stop me if you’ve heard this one.
Two optimists walk into a bar. The first one says, “Hey, where’d everybody go?”
Another gap up? Another reversal back under the open? No learning curve is this slow. Expiration is coming, and the position-jockeying is ongoing.
This morning’s extension of the overnight rally didn’t reject its test of 1938.00. But 1938.00 wasn’t clearly recovered, and was still being overlapped at 9:45. Its recovery offered a lot of reward — Christmas in January. But its reaction down is testing 1918.00.
20 points of the high is a lot of selling. Even more so — that comes after testing what would have been the renewed bias-up target at 1938.75, back under the 1933.50 bias-up target, and not yet rejecting the 1927.25 bias-up signal at 10:15.
It’s rare enough to reject tests of both bias parameters through 10:15. Rejecting them AND their renewed bias-up target is unlikely. In fact, the bias-up signal wasn’t rejected. It was being overlapped at both 10:15 and 10:30 to trigger noN-bias.
A simple correction still has room down to 1912.00 or 1907.00 before suggesting the decline has resumed. This post-open dip can resume the decline since the open didn’t gain traction. Entering or exiting the noon hour above a prior high would suggest the post-open dip was just a correction, after all.
Pre-market Tour (recording & summary)
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The overnight recovery back up to yesterday’s opening 1929.00 high has extended pre-open to 1937.50. It’s attacking relevant resistance from Friday afternoon at 1938.00, while also probing 1933.50. Either can reverse the market back down if their post-open tests aren’t extended higher through 9:45. Extending higher would have a big reward in mind for the effort.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… It’s beginning to look a lot like Christmas.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK <<==click here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Plunging about 20 points to 1893.50 at Sunday night’s open had recovered enough to gap up Monday and touch 1929.00. Selling resumed immediately, extending down through the noon hour. The slide ended abruptly after the noon hour upon only barely piercing the overnight low by 1 point. The noon hour’s 1905.50 low was recovered by just enough just in time to prevent sellers from gaining traction. Sellers also failed to gain traction from a steep drop through the 3:10-3:20 timing window that avoided fresh lows. A surge to 1923.00 ended the day unchanged around 1914.00.
Overnight action’s new info…
Monday’s late dip back to unchanged eventually extended down another 14 points to 1899.00. Sympathy for Chinese stocks falling was leveraged by concern for Crude Oil that was probing fresh lows. This morning’s bias-down target happens to be 1899.00, and its reaction extended up to 1912.00 through Europe’s opens. Crude Oil reversed up after a terrorist event in Istanbul triggered a surge that probed yesterday’s opening high to attack 1931.00.
If, then…
Monday afternoon’s low was on the precipice of the precipice. Retesting Sunday night’s low had room below for another 11 points down to 1881.00. The afternoon’s surge’s appearance was very timely, as any lower any later would have pierced an air pocket below. And now another precipice overnight has been recovered from 1899.00 to probe 2 points above Monday morning’s 1929.00 high. It should be noted that Crude Oil is the overnight recovery’s fickle catalyst. Already being oversold from China helped, and from remaining stable through Europe’s opens. While nothing about the pattern suggests it is becoming a durable bottom, sudden pre-expiration detours can have a dizzying effect. Above 1933.50 could extend to 1948.00 or even to 1975.00 — briefly, and temporarily, but steeply — before another downleg can gain traction. Otherwise, stomping immediately Tuesday on overnight optimism could resume the work of Monday morning’s sell-off.
First Trade…
Exiting the open at 9:45 above 1929.00 would be likely also to trigger the 1927.25 bias-up signal at 10:15. Exiting the open under 1921.00 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1933.50 | 1927.25 |
| …would target | 1940.50 | 1933.50 |
| Bias-down: under | 1913.50 | 1906.50 |
| …would target | 1906.25 | 1899.00 |
| Signal status: noN-BIAS, TESTED BOTH BIAS-UP PARAMETERS | 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)
The 18-point bounce from retesting overnight lows had held its 1910.00 resistance. It had retraced down to 1897.00 — 4-1/2 points back to the low. Sellers had not gained traction since the bias environment was exited within the noon hour’s range, and the final hour was entered there, too.
But that didn’t precluded extending down. And it didn’t enable a bounce. A big, humongous bounce.
Yet, that’s what followed. The timing was not appropriate for strong-handed sponsorship, but a 26-point rally touched 1923.00. That’s positive territory. Or, it was. A reaction down into the close ended the day flat.
It seems like success for a bottoming attempt — probe a new low, and recover its retest. But timing is everything, timing like origins and closes, and they suggest the decline has chipped away at support more than formed a base.
Nevertheless, neither buyers nor sellers gained traction for their efforts. So, gapping open either way Tuesday could be credible for extending in that direction intraday — whether above 1933.50 or 1943.50, or under 1899.00 or 1894.50.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.