S&P
What’s the opposite of backing-and-filling?
Initial reaction down from resistance gets squeezed.
The open’s reaction down from the 1950.50 bias-up signal had dipped to “lower prior highs” at 1943.50. That ranged sideways back to 1948.00 through 10:15 to trigger no-bias. Having held a test of the bias-up signal, that put into play an offsetting test of the 1935.50 bias-down signal.
A sudden surge flipped that on its head. Rather than drop 13 points to the bias-down signal, the surge extended into a 13-point rally that tested 1961.00.
There was never a fresh post-10:15 low, so the offsetting test of the bias-down signal is moot. Exiting the bias environment at 11:30 above the 1955.50 bias-up target would invalidate it anyway.
Overbought RSIs at the high require its retest eventually. That can wait if 1955.50 is reversed through 11:30. The no-bias rally’s steep slope and origin is suspicious for being sponsored by weak hands. But holding above 1955.50 would let the overbought RSI be more attractive than anything below.
Post-open Review… Lonely at the top.
Pre-open rally attracts little sponsorship at resistance.
This morning’s 1950.50 bias-up signal was touched post-open on the way down to 1943.50. That’s nothing. That’s just room for noise back down to yesterday afternoon’s “lower prior highs.” Yesterday’s late surge broke intraday downtrending support at 1942.50, which could be retested easily, too.
But having held a test of the bias-up signal to trigger no-bias, an offsetting test of the 1935.50 bias-down signal is now in-play. Heads-up: I wouldn’t be surprised if somehow that were no more productive than to retest 1939.00. Even then, if the pre-10:15 1943.50 low isn’t probed by 11:30, then the offsetting test will become moot.
Back above 1949.50 would begin indicating that rather than back-and-fill, the balance of the morning might instead range widely around 1950.50. That could include testing the 1952.00 pre-open high, and probing it.
Pre-market Tour… Streeeetchh.
Recovering from the overnight dip to 1938.00-1939.00 had extended up to 1946.50. Consolidating there back down to 1942.50 has resolved up pre-open to 1952.00.
So much for buying another dip.
Thin participation again this morning will make trending difficult. Backing-and-filling becomes much likelier if 1947.50 doesn’t hold as support through the open.
Details and other markets coverage are in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/zvvjskm
The First Trade… That old chestnut.
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…
Holiday-inhibited volume didn’t help to defend Sunday night’s rally to 1964.75 from being retraced entirely before Monday’s open, or from being reversed into Friday afternoon’s range after the open. But the open quickly fulfilled and held its 1938.00-1939.00 potential. Then the holiday-inhibited volume prevented attracting sponsorship for more than a temporary bounce or to attacking 1945.00.
Overnight action’s new info…
Overnight action didn’t initially seem inhibited, firming to 1949.50. But that was retraced back into negative territory, back under Monday’s lows, and deeper into Friday afternoon’s range back down to 1935.25. But an accumulation pattern centered around 1938.00-1939.00 has broken higher, surging to 1946.50.
If, then…
I was looking forward to yet another bite at the 1938.00-1939.00 apple. Its support has held for several sessions, and now again overnight. And the reactions there are more reflective of accumulation than of chipping away at support. Not that this morning’s action will resume trending, with participation still a little thinner. And yesterday’s buyers didn’t gain traction. So, gapping up only to test yesterday’s highs without exceeding them could spend the balance of the morning backing-and-filling back into yesterday’s range. So long as its lows hold, the week’s biggest rally leg can develop.
First Trade…
Exiting the open at 9:45 under 1938.00 would be likely at least to test this morning’s 1935.50 bias-down signal. Exiting the open above 1943.50 would be unlikely to test bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1961.75 | 1950.50 |
| …would target | 1966.75 | 1955.50 |
| Bias-down: under | 1946.75 | 1935.50 |
| …would target | 1941.00 | 1929.75 |
| Signal status: INVALIDATED NO-BIAS, TESTED BIAS-UP SIGNAL | 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.