S&P
Reacting down from the 1939
Reacting down from the 1939 overnight high to range around 1925 was already vulnerable to attracting another round of sellers at the open. Now, more so, the overnight high has been attacked again, much nearer the open. Failing to hold 1934 would suggest the head-fake template was developing. Recovering 1941 would suggest the overnight rally is extending intraday. Details and other markets coverage are in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/fbkypjx
The First Trade.,, Another hope spring?
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…
Monday night”s plunge didn”t extend down immediately. Rather, Tuesday morning formed a Symmetrical Triangle that narrowed between 1921.00-1940.00 to its 1231.00 apex at noon That broke lower into an Expanding Triangle between 1913.00-1927.00 that broke lower into the final hour. Its plunge to 1898.00 was recovered as quickly back into the afternoon”s triangle.
Overnight action”s new info…
Firming back to 1921.00 then accelerated to 1934.00 in reaction to BOJ intervention. Improving later to 1939.00 proved temporary, eventually reacting down to test 1921.00.
If, then…
We haven”t seen an overnight head-fake in awhile. That”s trending in one direction overnight which reverses into quite a different tone through the morning. The reversal tends to be abrupt at the open, but avoiding a head-fake by resuming the overnight trend need not be very obvious immediately. This being Wednesday before a three-day weekend, trending to new extremes should be obvious early, or else new extremes become unlikely. So, sell signals will get a bigger benefit of the doubt than buy signals.
First Trade…
Exiting the open at 9:45 above 1925.00 would be likely also to exceed the 1922.75 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1911.00 would be unlikely to trigger the 1915.25 bias-up signal at 10:15.
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1918.50 | 1915.25 |
| …would target | 1926.00 | 1922.75 |
| Bias-down: under | 1910.25 | 1907.00 |
| …would target | 1904.50 | 1901.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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.
Tuesday”s break from its 1913-1919
Tuesday”s break from its 1913-1919 range finally began after the 3:10-3:20 timing window had lapsed. That was too late to be sponsored by strong hands, but it was plenty productive, touching 1989.75 at its low. The drop”s productivity was the product of its timing, and not of its weak-handed sponsorship that was retraced entirely into the 1913-1919 range.
Late, weak-handed selling pressure, fulfilling its targets, not closing under a level that might put into play lower targets. And all after breaking from the morning”s Symmetrical Triangle, a pattern that tends initially to break falsely in one direction before reversing more substantially in the opposite direction. A rally would be credible.
So long as oversold RSIs at Tuesday”s late 1898.75 low, attracting price down first, doesn”t get carried away. Being Wednesday ahead of a three-day weekend makes extending the decline likely to be obvious now, or else avoid it until next week… Details and other markets coverage were discussed during the post-market Tour, recording linked here:
https://roddavid10.mitel-nhwc.com/join/shwtypz
After 6:30 ET, use one of the following links to monitor the overnight Globex action:
Win XP-Friendly — http://anymeeting.com/127-847-235
non-xp friendly — https://roddavid10.mitel-nhwc.com/join/bfyytsh
Pre-close view.. Fighting the lifeguard.
Fresh low finally (albeit barely) probed.
One of the most important lessons learned by lifeguards is not to let drowning victims drag you under with them. I”m reminded of this while trading several attacks and probes of fresh lows that keep fighting back prematurely.
This afternoon”s renewed bias-down environment dipped eventually to 1913.25. This could have served to launch a recovery, and in fact it was recovered back up to this afternoon”s 1926.00 bias-down signal. But its resistance pushed back, and now another slightly lower fresh low is flailing about at 1912.75.
Trending down through 3:10-3:20 could have added a lot of confidence to riding a short through the close. So long as 1920.50 isn”t recovered, I”ll still give fresh lows a benefit of the doubt for testing not only 1911.00 but also 1907.00.