S&P
Yesterday”s recovery tried gaining traction
Yesterday”s recovery tried gaining traction in the afternoon, but only one timing window showed enough effort. But the next two didn”t reject it. Nevertheless, the effort has extended higher overnight, first up to 2101.50, and now to briefly touch 2105.75. Gapping up is necessary to resume a rally that didn”t gain traction, so this action is promising, keeping alive potential to new highs within 24-48 hours. It”s also vulnerable — not maintaining a gap up can produce a rubber band effect that retests yesterday afternoon”s lows, 15-16 points lower. See you at the 8:55 ET pre-market Market Tour in the chaRTroom, which you can access anytime here:
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Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2106.50 | 2101.50 |
| …would target | 2112.25 | 2107.50 |
| Bias-down: under | 2092.75 | 2088.00 |
| …would target | 2088.00 | 2083.00 |
| Signal status: noN-BIAS, TESTED BIAS-UP 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.
Tuesday”s drop could have been
Tuesday”s drop could have been a lot worse.
There was additional pullback potential down to 2091.25 under Monday”s 2099.50 low. But there was no requirement to test it. Having probed under it overnight, opening above it could have launched a durable intraday rally. But it didn”t hold, it wasn”t recovered, and the market left negative territory only intermittently.
A recovering must exploit that positioning by at least exiting Wednesday”s bias environment in rally mode, above Tuesday afternoon”s ~2101 high. A morning dip could still be recovered. Indeed, a morning dip would still likely be recovered. But not recovering a morning dip would target Tuesday”s opening range, and perhaps lower.
Avoiding a bigger decline required holding the pre-open 2079.25 low. It was. Reversing momentum up required opening above 2091.25. It was not. Closing above 2094.25 at least kept sellers from regaining traction, but closing above 2096 would have been more convincing.If it sounds like the market could trend either way here, that”s because it can. And the setup into Wednesday morning allows for trending sharply in both directions (not at the same time) and still return to unchanged.
Here”s more in the pre-market Tour:
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Pre-close view… Second chance.
Bias environment exit looking for traction.
The bias environment exit at 2:30 was above the noon hour”s high. This is bullish. But it is in a vacuum, and meaningless without confirmation. Its confirmation would have been entering the final hour above the bias environment”s high, but the final hour entry dipped.
There is a proxy, the 3:10-3:20 window. Remaining within the range wouldn”t be predictive either way. However…
Trending up to a fresh session high above 2100.75 would signal what the final hour”s entry did not, that buyers had gained traction.
The proxy window can cut either way. Trending down under the bias environment”s 2093.25 high through 3:10-3:20 could extend back into the open”s range at 2083.00.
Ending today under yesterday”s 2101.00 cash session close equivalent would keep the burden of proof on buyers that today was just a corrective dip.
Pushing like its life depends on it.
Because it does.
Exiting the open above 2091.25 would have marginalized sellers. Probing it and reversing back under 2088.00 would have marginalized buyers. Since 2091.25 wasn”t quite touched before reversing back under 2088.00, the plunge to 2080.25 couldn”t marginalize buyers.
Exiting the morning”s bias environment above 2096.00 would have marginalized sellers. Rejecting its test back under 2091.25 into the noon hour would have marginalized buyers. But reacting down from testing 2096.00 entered the noon hour above 2091.25. Still no marginalizing.
Still no traction, either. So, this session remains vulnerable to wide fluctuation.
Now a dip under 2096.00 has been isolated to the afternoon”s bias environment — entering and exiting the window above it, with an interim dip below it. Its recovery has extended to a fresh session high testing 2099.50.
That”s another relevant level, and so we start again…
Having touched 2099.50, entering the final hour under it would still be vulnerable to reversing down. Otherwise, the potential for a short-squeeze is high.