S&P
Post-open Review… Climbing out of a hole by digging deeper.
Post-open dip tries trapping shorts to fuel a rally.
Opening 4 points above the 1932.00 bias-down signal didn’t prevent probing under it a few moments later. And probing under it didn’t prevent recovering back up to the 1937.50 pre-open highs.
But all of that chop, and more, was all still within the ongoing range and not signaling a direction. The only directional intent to glean from that price action was its “ineffectual optimism” — hovering at the pre-open highs for so long without extending higher made fresh lows likelier.
Whether or not fresh lows were part of triggering the 1932.00 bias-down, or just to stretch the rubber band so it could snap back up, remains to be seen. The bias-down signal was touched within 3 minutes of 10:15 to invoke the grace period.
The pre-open premise was that gapping down within yesterday’s range probably wouldn’t extend down. The post-open premise to selling the open’s strength was that retesting the 1927.50 overnight low was needed to trap shorts.
Now a bounce from that low’s retest is almost 3 points back above the 1932.00 bias-down signal. This being a Friday, triggering no-bias could marginalize sellers well into the afternoon. So, resuming the decline should begin aggressively if it’s credible.
Pre-market Tour… Gapping isn’t enough.
Ranging back up to 1937.50 has been supported by 1928.00-1930.00. Any lower through 9:45 would make the 1932.00 bias-down signal likelier to trigger. Even then, although extending down quickly would get a benefit of the doubt, this being Friday means be extra vigilant for reversals. Meanwhile, just exiting the open back above 1937.50 would at least undermine sellers, even if that only means absorbing another dip. Details and other markets coverage is in the pre-market Tour, recorded here.
The First Trade… Friday factors
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…
Thursday’s wide-ranging session missed an opportunity for buyers to gain traction. Its rejection offered an opportunity for sellers to gain traction, but that was missed, too. The session’s final minutes dipped to unchanged around 1933.00 before bouncing slightly into the close.
Overnight action’s new info…
Initially extending Thursday’s late bounce another 7 points to attack the 1949.75 within 2 points. The excess was retraced back at 1942.00, where Europe’s opens triggered a slide that has extended down to 1927.50.
If, then…
Thursday’s action suggests trending is unlikely, although the wide range does allow normal noise to be pretty productive without actually trending. The morning’s bias tends to persist through the noon hour on Fridays. The prior two Fridays gapped open and ranged choppily intraday, but didn’t trend. So, bias-down would be credible if triggered, but a range bound session would more likely hold the bias-down signal’s test so that the overnight high’s would become required.
First Trade…
Exiting the open at 9:45 under 1930.00 would be likely also to trigger the 1932.00 bias-down signal at 10:15. Exiting the open back above 1937.00 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1961.25 | 1949.75 |
| …would target | 1966.50 | 1955.00 |
| Bias-down: under | 1943.50 | 1932.00 |
| …would target | 1935.50 | 1924.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN 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.
Post-market Wrap
Foreclosing upon further upside didn’t default to resuming the decline. So, that wasn’t the decline resuming? Breaking 16 points in an hour from — 1949.00 down to 1939.00 — certainly seems like a decline. Of course, it is a decline, but it didn’t necessarily resume the decline.
In fact, both 1-minute and 3-minute RSIs teased at oversold without breaking it. That’s not selling pressure, that’s prices falling of their own weight. And that’s different from resuming the decline.
Neither buyers nor sellers gained traction for their efforts, so there is no requirement for Friday to reward either. The last two Fridays ranged relatively narrowly after their opens. There’s room for ranging a couple dozen points above and below Thursday’s close, which will take a lot to resume the decline or to attempt another recovery.
Details and other markets coverage were discussed during the post-market Wrap, click here.
Following are chaRTroom links to monitor the overnight Globex session:
XP-Friendly || non-xp ilinc