S&P
Post-open review… The circle of life.
Pre-open firming, post-open surge, post-surge plunge.
The open avoided signaling that the range-bound action would persist. Firming to fresh highs into the open enabled a surge to test the 2104.00 bias-up target. Its reaction down to 2101.50 was recovered to fresh highs at 2106.75.
Bias-up was renewed, putting into play a renewed target at 2110.00. And there”s no reason to touch 2110.00 other than to confirm yesterday”s breakout targeting new highs.
But beware the headlines.
Several minutes after violating a pullback limit at 2105.25, the IMF was described as differing from the Greece deal. That triggered a spike down to 2100.00 and 2097.75. This being a bias-up environment, the 2098.75 bias-up signal should define the range”s lower-end if tested.
Reacting back up above 2101.50 is trying to signal the dip is done, and momentum is reversing up. Just holding above 2099.25-2100.00 keeps sellers from regaining traction. But since there has been no fresh high since before 10:15, exiting the bias environment at 11:30 under 2104.00 would be difficult to resume rallying again today.
Favorable reactions to this morning”s
Favorable reactions to this morning”s trio of 8:30 econ reports has pushed S&Ps above 2100 to 2102.75. That”s yesterday”s spike high, which held overnight. And it”s testing 2101.50, which must now be exceeded through 9:45 to make the 2098.75 bias-up signal any likelier to trigger at 10:15 — by the same token, having touched 2101.50, not exceeding it through 9:45 would make bias-up unlikely to trigger, putting into play a test of the bias-down signal… which could still trigger by 10:15. So, rallying this morning depends on much more than just gapping up. Here”s the pre-market Tour recording with more detail:
https://roddavid10.mitel-nhwc.com/join/jrtmkyz
The First Trade… Freeze.
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…
Gapping up above Tuesday”s 2076.75 high (basis Sep) wasted no time extending higher Wednesday to exceed the bias-up target. Renewing the bias-up signal next targeted 2092.00, which was met by late-morning. Then Greece news triggered a spike up to 2100.00, and the balance of the session ranged narrowly back to 2095.00. Buyers gained no traction for the effort, since both the bias environment exit and final hour entry were within the noon hour”s range.
Overnight action”s new info…
Yesterday afternoon”s narrow 2095.00-2100.00 5-point range has persisted through the night..
If, then…
Is the market walking on eggshells awaiting Greece”s next phase? Apparently. No other headline has its presence or its consequence, and things are happening. Just keep in mind that the first break from an extended narrowing range tends often to be false. This 5-point range is certainly extended, but night quite narrowing. Also, having contained the prior afternoon”s three timing windows within the same range, this morning”s timing windows can be contained if the open isn”t trending.
First Trade…
[The front-month rolls forward from Jun to Sep at this morning”s open] Exiting the open at 9:45 above 2101.50 would be likely also to trigger the 2098.75 bias-up signal at 10:15. Exiting the open under 2090.75 would be likely to trigger the 2093.75 bias-down signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2107.50 | 2098.75 |
| …would target | 2112.75 | 2104.00 |
| Bias-down: under | 2102.50 | 2093.75 |
| …would target | 2096.25 | 2087.50 |
| Signal status: BIAS-UP, EXCEEDED BIAS-UP TARGET | 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.
As suspected, the late-morning spike
As suspected, the late-morning spike up on Greece headlines extended the rally ahead of itself. It seems impressive that the final hour didn”t correct any of the spike, but that runs the risk of “ineffectual optimism.” Especially since buyers gained no traction for their efforts (both exiting the bias environment and entering the final hour within the noon hour”s range).
Gapping up Thursday would be less than half the battle to avoiding a delayed corrective dip — maintaining the gap, and extending it, will also matter. Nothing will marginalize sellers at this stage of the pattern, so early strength could stretch the rubber band before it snaps back down hard.
Meanwhile, Wednesday”s breakout will be looking for a second consecutive higher close to confirm that new highs are now in-play. The early Market Wrap is entirely relevant since later price action ranged narrowly:
https://roddavid10.mitel-nhwc.com/join/zvshjjz
Overnight links to view chaRTroom action:
XP-Friendly: Unavailable tonight
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Programming note: As with last Thursday, I am available only through the noon hour and the afternoon bias signal. The chaRTroom should be available (an ISP outage prevented that on Wednesday). This is not a recurring thing, so thanks to all for your indulgence!