S&P
Mid-day Update… Not exactly “easy come.”
Bullish WedEX lapses in a big way.
The overnight rally to 1964.25 was substantial, but nothing pre-open could be attributed to the potential bullish WedEX signal. Post-open action did probe the overnight high, and Friday morning’s high, eventually trending steeply to 1969.00. That fulfilled the bullish WedEX.
WedEX applies only to Friday afternoon and Monday morning — nothing before, and nothing after. The latter part was made obvious by a plunge at 11:30 that probed fresh post-open lows. In fact, natural support at Friday’s 1946.00 cash session close is being filled now (down to 1944.25).
What caused the about-face — Russia just announcing an unexploded shell landed in its Damascus embassy Sunday, or simply Europe’s closing and the USD dipping? Whatever, it’s too late for rejecting it through the noon hour’s exit, so a bottoming effort is needed before a buy signal can be identified.
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1972.25 | 1961.25 |
| …would target | 1978.50 | 1967.50 |
| Bias-down: under | 1965.50 | 1954.50 |
| …would target | 1959.75 | 1948.75 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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… Hanging on for dear life.
Pre-open pullback holds, but not yet reversed.
Like the iconic 1980’s poster, this morning’s post-open action seems to be trying not to let go after climbing up to a high limb.
The pre-open pullback from 1964.25 had touched this morning’s 1956.25 bias-up signal as support. A post-open blip-down extended 2 more points momentarily. But that was recovered to the 1962.75 bias-up target. Which held.
Its reaction down threatened the bias-up signal but bias-up triggered. So, this is a bias-up environment whose target has been met.
Exceeding the 1962.75 bias-up target through 10:30 would have renewed the bias-up signal. It’s too late for that, and already having touched the bias-up target, the balance of the morning usually only ranges sideways.
Usually. Usually, the balance of the morning isn’t potentially influenced by an aggressively bullish WedEX. So, I won’t be considering a sell signal, and until disproved, I’ll assume the rally is extending higher before noon.
Pre-market Tour (recording & summary)
Surging 5 points to 1964.25 just after publishing The First Trade blog post has reacted down 6 points to 1956.25 pre-open. That helps to restrain optimism. But only to a point, because much deeper could simply resume the decline post-open.
1956.25 is reasonable for a pre-open pullback low. But there is room down to 1953.25 before signaling a new downleg underway. Back above 1960.50 and 1962.25 should signal the recovery has resumed, presumably to fulfill the bullish WedEX by rallying aggressively.
Details and other markets coverage is in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/jrcwbhh
The First Trade… Behaving bullishly.
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)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Friday’s gap down to 1949.00 was an improvement from the 1944.25 pre-open low. The morning’s bias environment rallied to 1967.50, but the balance of the session probed lower and lower lows down to 1941.25. Reactions to those lower lows each bounced back above the morning’s low — so, not actually extending down. This accumulative behavior was the afternoon’s only qualification for the bullish WedEX
Overnight action’s new info…
Flat-to-lower ranging didn’t extend Friday’s last bounce up to 1952.25. China’s open erased it, in two legs down to 1938.50. RSIs diverged positively on its retest, launching a reversal that is now probing almost 2 points above Friday afternoon’s bias environment 1957.25 high.
If, then…
The overnight rally could double or triple, and still be irrelevant to the bullish WedEX’s influence which applies only to post-open action. Since WedEX’s influence Friday afternoon was at best accumulative, Monday morning’s price action should behave that much more bullishly to compensate for its delay. While rallying sharply this morning would fulfill the WedEX, don’t lose sight of the possibility that the signal has failed — and that post-open action can trend back down. Regardless, retracing all of Friday afternoon’s bias environment does suggest the drop has been only a correction.
First Trade…
Exiting the open at 9:45 above 1957.25 would be likely to trigger this morning’s 1956.25 bias-up signal at 10:15. Exiting the open back under 1953.50 would be unlikely to recover the bias-up signal in-time to trigger it. [Added 10 minutes later as the market had just surged to 1963.75: Exiting the open above 1964.00-1964.75 would be likely also to exceed the 1962.75 bias-up target at 10:15 to renew the bias-up signal.]