S&P
Afternoon bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2066.00 | 2058.75 |
| …would target | 2071.00 | 2064.00 |
| Bias-down: under | 2058.00 | 2051.00 |
| …would target | 2052.25 | 2045.00 |
| Signal status: BIAS-DOWN | 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… Too much of a good thing.
Extreme buying pressure attracts little sponsorship.
Gapping up above yesterday afternoon”s 2053.25 bias environment high would have formed a session-long rally setup. That threshold was raised to the morning”s 2058.00 bias environment high, once it was probed. Then yesterday”s 2063.75 pre-open high became part of the mix — not as consequential, but relevant.
All of which were exceeded before the open.
A blip-down to 2063.75 surged to a fresh high at 2068.00, which reacted back down to overlap 2063.75 at 9:45. Maintaining its recovery would have been optimal to confirming the session-long rally. But the open had maintained its gap up above yesterday morning”s 2058.00 bias environment high.
So, session-long rally gets a benefit of the doubt. The next opportunity to signal otherwise is at 11:30 upon the bias environment lapsing.
A sell signal had triggered already under 2064.00, with potential to 2058.00. Giving the session-long rally a benefit of the doubt didn”t prevent extending down to 2058.00 — or lower to 2053.75.
But, session-long rally still gets a benefit of the doubt.
Back above 2058.00 (being tested now) would start to signal momentum reversing up. Its minimum consequence is to retest the downleg”s 2068.00 origin. There”s no reason for that during a session-long rally other than to extend much higher.
Otherwise, extending the post-open drop would next target 2051.00. And this late in the session, that would probably not recover 2058.00 by 11:30. Which would instead signal the session-long rally had inverted.
The overnight rally has extended
The overnight rally has extended up to 2064, where Globex had peaked before yesterday”s open. If touched post-open, then it must be exceeded through 9:45 to form the session-long rally setup. Whether 2064 were touched or not, back under yesterday morning”s 2058 bias environment high at 9:45 would invalidate the session-long rally — and possibly also invert it to be as bearish as it could be bullish. More detail is discussed in the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/mjztwrh
The First Trade… Correcting for the halt’s effects?
Proper context can start the day with a solid win and make all the i 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…
Gapping down Wednesday to its 2062.50 bias-down target was extended lower through an eventful day, marked by an unprecedented NYSE halt and unaccommodating FOMC Minutes. It was an inside day, which often makes the pessimism ineffectual. But the final hour hovered optimistically above Tuesday”s lows after piercing Tuesday”s 2037.25 pivotal low.
Overnight action”s new info…
Almost the mirror image of Tuesday night”s pattern, last night”s Globex action has only trended up. Yesterday”s entire session has been retraced, touching its opening blip-up 2061.75.
If, then…
Having trended down into yesterday”s close, maintaining a gap up above the afternoon”s 2053.25 high could form a “session-long rally” setup. The gap up”s threshold will be yesterday morning”s 2058.00 high if today”s open were still probing above it. In either case, maintaining the gap up would leave unfinished business below, since touching Tuesday”s pivotal low requires testing its 2035.00 actual low, too. In fact, that would be the objective of not maintaining a sufficient gap up — which can become more difficult when overnight action has trended relentlessly. Otherwise, a session-long rally would target the range”s 2072.50-2076.00 upper-end.
First Trade…
Exiting the open at 9:45 above 2058.00 would be likely also to exceed the 2052.25 bias-up target through 10:15 to renew the bias-up signal. There are no other relevant preliminary signals, other than the “session-long rally” setup.
Did sellers regain control Wednesday?
Did sellers regain control Wednesday? Or, did the NYSE halt delay a recovery. One big indication is that the last 60-90 minutes probed under the morning”s low but failed to recover. By not rejecting those late sellers, the market tacitly endorses them — and their direction. So, holding short could be contemplated, with two caveats:
First, although the fresh low wasn”t rejected, neither was it extended. Especially not before coming to within 3 minutes of the cash session close. While already breaking lower would have been optimal for the setup, ranging calmly sideways was a kind of eerie calm before the storm.
Second, Wednesday”s drop was largely “ineffectual pessimism,” being an inside day that trended down. But ineffectual optimism appeared while hovering just above Tuesday”s low throughout Wednesday”s final hour. Gapping down Thursday would be a normal delayed reaction.
There is actually a third caveat, as important as the first two, but different. The NYSE”s unprecedented three-hour halt probably affected my timing windows somehow, and to some degree. Unless Thursday”s open is way out of line, I”ll assume the halt”s influence is moot.
Speaking of Thursday”s open… One way to instantly invalidate the downside potential is by gapping up. Not a little, but 14 points to recover Wednesday afternoon”s 2053.25 high. We would presume, as usual in this setup, that rejecting Wednesday afternoon”s rally would form a session-long rally.
Otherwise, extending down at all at this stage is likely to extend a lot. And steeply. Starting on Thursday morning would be likely to extend through Monday morning. Either way, the market is not about to begin behaving calmly.
More discussion is found in the post-market Wrap recording:
https://roddavid10.mitel-nhwc.com/join/bwhcstr
[I”ll make overnight links to the chaRTroom available later in this post”s comments section]