S&P
Mid-day Update… A little too right.
The dive was exacerbated, but its recovery is a little much.
I’ve reiterated several reasons why the overnight plunge was exacerbated. Not that it couldn’t extend deeper intraday — today is the last day for correcting the recovery before holiday bullishness appears. But regardless of its depth or duration, today’s sellers would be trapped.
Already, that seems to be obvious. A little too obvious, a little too quickly.
After rejecting the open’s rally from 2078.50 back down to 2067.00, the minimum requirement for suggesting sellers were done was to exiting the bias environment above 2072.50. The bias environment began lapsing at 2077.00.
Then, the minimum requirement to keep price action trading flat-to-lower was to hold 2080.50 as resistance. The noon hour was entered at 2082.50. This brings the session back to unchanged.
Regardless of its current upward momentum, rallying this afternoon still seems very premature. Back under 2080.50 would start to signal a dip back down to 2074.75 or 2072.50. Bias-up above 2082.50 at 1:20 would nevertheless get every benefit of the doubt.
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2085.25 | 2082.50 |
| …would target | 2090.50 | 2088.00 |
| Bias-down: under | 2079.50 | 2077.00 |
| …would target | 2074.50 | 2071.75 |
| Signal status: BIAS-UP | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Get used to it.
Pre-open bounce finds post-open sellers. Eventually.
Opening at 2071.50 was already 4 points off the most recent pre-open low. But it was still far short of the 2077.75-2079.00 resistance described during the pre-market Tour as differentiating between temporary bounce or continuing the drop.
The opening 15 minutes of volatility came within 3 ticks of 2079.00 before peaking. Its reaction down finally got underway, and has made up for lost time by retracing all of the pre-open low down to 2067.00.
The plunge’s 2065.50 low can be retested, too, and probably by a wide margin. This is Tuesday of Thanksgiving week, and sellers can control it all. Back above 2072.75 would be the minimum requirement to even begin considering they’re done.
Pre-market Tour (recording & summary)
Another dive attacked the 2065.50 overnight plunge’s low to within 2 points at 2067.25. Its reaction up to 2073.00 isn’t enough to prevent another dive, perhaps also a new downleg. Opening above 2077.75-2079.00 would be the minimum recovery to deserve full confidence in avoiding another dive.
Details and other markets coverage are discussed in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/kfyswvk
The First Trade… Turkey shoots down a Russian jet, and a rally.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
[Thanks to all who helped test the new room last night ! ]
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Flat-to-higher up to 2093.00 Monday morning didn’t extend the bearish WedEX influence. But an offsetting test of the morning’s 2082.50 bias-down signal was put into play. That applied also to the afternoon, which plunged to 2081.25 during it no-bias environment. A retracement back to the 2088.00 bias-down signal became “unfinished business above.”
Overnight action’s new info…
Bouncing to within 3 ticks of 2088.00 neutralized its attraction. Coinciding within minutes was news of a Turkish missile coinciding with a Russian jet fighter. Both were direct hits, triggering a 1-hour, 20-point plunge down to 2066.50. The last 61.8% dropped at an exponential pace from 2079.00, and has been retraced. Price action since then has ranged choppily sideways down to 2073.00.
If, then…
Was reaction to the Russian jet downing exacerbated by coinciding with two other influences? First, the market had become vulnerable already to a correction. Last week’s test of 2068.00 up to the 2082.50 prior high had opened the door to a correction. This weekend’s Saturday Review described the pre-holiday window where a correction must occur if it were going to occur at all. And yesterday’s post-market Wrap described the four consecutive sessions of probing above 2082.50 that never actually broke its resistance. Also exacerbating the market’s reaction was the news coinciding with Europe’s opens. That was a direct hit. But even if the overnight drop was exacerbated, immediately reversing the direction back up isn’t assured. Remember that bullish holiday seasonality doesn’t begin before this afternoon. Although the 2065.50 overnight low need not be retested before resuming the rally, its gravitational pull remains intact until recovering back above yesterday’s lows.
First Trade…
Exiting the open at 9:45 above 2082.50 would be unlikely to trigger the 2080.50 bias-down signal at 10:15. Exiting the open under 2077.75 would be likely to trigger the 2080.50 bias-down signal. Exiting the open under 2070.50 would be likely also not to recover the 2074.75 bias-down target by 10:15 and renew the bias-down signal.