S&P
Choppy consolidation resisted by 2112
Choppy consolidation resisted by 2112 broke higher and eventually surged to attack 2120. Gapping up above yesterday”s 2116 high would compensate for not maintaining the afternoon rally. It still could, but it”s more difficult now since retracing it all back down to 2112. We”ll still expect bigger things above if the opening 15 minutes recovers 2114.75 (now being attacked to within 2 ticks). It must be recovered almost immediately to enable gapping up above 2116. Otherwise, there isn”t anything bullish about another failed rally effort.
Here”s the pre-market Tour recording for details:
https://roddavid10.mitel-nhwc.com/join/ypyjthv
The First Trade… All quiet, on all the fronts.
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…
Tuesday morning”s recovery from fresh lows attacking 2096.00 was reversed well into positive territory. But dropping 10 points from 2116.00 had retraced the noon hour”s 6-point surge back through its inflection, and back into negative territory. The trend, itself, had not reversed down, but the attempt to squeeze the morning”s shorts seemed a failure. Was it undone by only having attacked last week”s 2096.00 low, rallying impatiently before a more thorough testing could have formed a more durable bottom?
Overnight action”s new info…
Yesterday;s 10-point drop into the close, and into negative territory, hasn”t extended any deeper. Narrow ranging has gotten volatile, but hasn”t become trending. Surging to 2112.00 into Europe”s opens has ranged widely, down to 2107.50 and back up again.
If, then…
Retracing yesterday”s 6-point noon hour surge was not insignificant. That surge had attracted new sponsorship, extending up another 2 points before peaking. Its reaction down did stop short of retracing back to the 2104.25
last relative low that had preceded the surge. So, duplicating yesterday afternoon”s rally would be credible for extending it much higher this time. The most credible rally attempt would gap up. But attempts to rally from under 2104.25 would more likely be only temporary corrective bounces on the way back down through yesterday”s lows.
First Trade…
Exiting the open at 9:45 above 2114.75 would be likely also to trigger the 2112.00 bias-up signal 30 minutes later at 10:15. Exiting the open under 2108.25 would be unlikely to trigger bias-up. Exiting the open under 2102.25 would be likely to trigger the 2104.25 bias-down signal.
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2113.75 | 2112.00 |
| …would target | 2119.75 | 2118.00 |
| Bias-down: under | 2106.00 | 2104.25 |
| …would target | 2100.50 | 2098.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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 session failed to exploit
Tuesday”s session failed to exploit the morning”s trapped shorts. So, the natural question is whether Tuesday morning”s sellers are weak-handed. They allowed impatient buyers to have their way, avoiding an intraday test of last week”s 2096 low, which prevented a more reliable low from forming.
That impatience will be an issue if Tuesday afternoon”s 10-point slide to 2106.50 were to extend down any deeper. An overnight dip could be recovered again before the open, but that would be asking a lot of buyers at this stage.
Having trended down into Tuesday”s close, gapping up above the afternoon bias environment”s 2116 high would form a session-long rally setup. Regardless of the overnight action, just opening above 2112 could marginalize sellers. Otherwise, renewed selling pressure could extend down sharply, perhaps even overnight.
More detail is covered in the post-market Wrap, recorded here:
https://roddavid10.mitel-nhwc.com/join/bwzyhmm
Tonight”s chaRTroom links are here:
XP-Friendly: http://anymeeting.com/311-962-216
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Pre-close view… Rally misses its window.
Not for lack of trying, but positive territory has evaporated.
The noon hour”s 6-point surge to 2114.00 extended through the afternoon”s bias-up target by 1 point to 2116.00. Its reaction down exited the bias environment holding a test of 2112.00 as support.
But the dip from 2116.00 has since extended down to 2107.25. That”s the origin of the noon hour”s 6-point surge.
After trapping this morning”s shorts, a very productive afternoon rally should be squeezing them further. But it”s not. Another rally leg can be signaled back above 2110.00, but that must be sooner rather than later to squeeze shorts that initiated under 2112.00 after 2:30.
Otherwise, rallying overnight or tomorrow would be unlikely if this afternoon”s pullback were to extend under 2106.50. Closing back above 2112.00 would be a big step toward producing a delayed reaction to this morning”s recovery.