S&P
The First Trade… That might leave a mark.
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…
Firming at Monday”s open peaked upon touching Friday”s 2113.50 prior high. Its recovery was necessary to resume Friday morning”s rally, since buyers were fully rewarded and had failed to gain new traction. Trending back down through the afternoon”s bias environment stopped a little optimistically short of its potential to at least 2102.50. Last-hour selling took over by probing the lower-end of its potential down to 2098.50. No unfinished business below was left outstanding.
Overnight action”s new info…
Monday”s late dive extended to test 2096.00. Relatively narrow ranging tired of the status quo, and eventually firmed up to 2101.00. Apparently, that only angered the market into snapping back down sharply to fresh lows. A seemingly relentless slide has extended to attack 2079.00 — along the way, ignoring three consecutive 3-minute RSI positive divergences (four 1-minute divergences). The last divergence was finally recognized by printing at least 2085.00. And then it reacted back down to 2082.00.
If, then…
Two points: First, while yesterday”s pullback was sufficient to extend the rally targeting new highs lower lows at 2091.25-2092.50 would have confirmed. And still could. Recovering at least that much by the open, and then improving through the open, could probe new highs today. Today, not a typo… Second, the alternative is diametrically opposite, and then some. Three consecutive ignored positive divergences (bouncing only shallowly before extending lower) happens when market facilitators panic calmly. At this stage, either they”ve absorbed very large selling pressures, or at least an equivalent amount is yet to come. The former would form a bottom, while the latter could last all day — conservatively targeting the 2062.00 area. More so, the latter could take new highs off the table… A third bonus point: Among other scapegoats, the drop is associated with Greece”s debt payment scheduled today. Making it wouldn”t end their crisis, but it would likely end this leg. Meanwhile, VZ just announced it is buying AOL at a 20% premium to yesterday”s close, so scapegoats for a rally aren”t all dead.
First Trade…
Exiting the open at 9:45 above 2093.50 would be likely to recover this morning”s 2092.50 bias-down target through 10:15, and not renew the bias-down signal. Exiting the open under 2084.50 could extend next to the 2077.00 area.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2110.25 | 2105.00 |
| …would target | 2106.50 | 2101.50 |
| Bias-down: under | 2103.50 | 2098.50 |
| …would target | 2097.75 | 2092.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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.
This will be very, very
This will be very, very ugly if not contained here. An otherwise uneventful overnight range had been hugging yesterday”s post-close 2096 low. It had even started firming, surging somewhat to within 2 ticks of 2101.50. But, apparently, that only stretched the rubber band, and it snapped back hard. A relentless 20-point slide from there has extended to 2080.25.
And here”s something we haven”t seen in awhile — three consecutive RSI divergences resolved in lower lows… I”ll have more soon in the First Trade blog post, and then during the morning the pre-market Tour. Tune in now at:
Win – XP friendly: http://anymeeting.com/770-463-232
non-xp ilinc-Mitel: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Sellers gained traction for their
Sellers gained traction for their efforts Monday. But hold-short was not considered. We precluded it around 2102, after a sell signal there had triggered. Its target remained intact — a retest of 2099.50”s oversold RSIs, probably down to 2098.50 — and both were tested at the cash session close and futures close.
In fact, the selling extended to test 2096 after the close. That”s still not a hold-short, because there”s no “unfinished business below.” There is no greater likelihood for extending down overnight, only room for noise down to 2091.25.
Extending down overnight could produce a very bearish session Tuesday, if not recovered by the open. Meanwhile, having trended down through the close, gapping up Tuesday above Monday afternoon”s 2108.75 high would form a session-long rally setup. More on that is in the post-market Wrap recording:
https://roddavid10.mitel-nhwc.com/join/wzcmpfy
Here”s chaRTroom links to view overnight action:
Win – XP friendly: http://anymeeting.com/628-785-210
non-xp ilinc-Mitel: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Pre-close view… Setting up on the back tees.
Sellers gaining traction as they meet more downside targets.
The offsetting test of this morning”s 2104.25 bias-down signal had been met to within 3 ticks. That was close enough to neutralize its attraction. But it didn”t attract buyers, instead extending down to 2099.50.
Oversold RSIs at the 2099.50 low require its retest. Its retest is likely, down to 2098.50, so long as 2103.00 isn”t recovered first (being probed now).
Meanwhile, the final hour was entered under the bias environment”s low. This followed the bias environment exiting under the noon hour”s low. Sellers gained traction, and their reward is to control the next morning. Not just piercing a fresh low, but trading exclusively negative, and possible trending down.
That reward can be avoided by rallying instead. But the only credible rally tomorrow would begin by gapping up.
Currently, a bounce is testing 2104.25. Extending higher can leave the “unfinished business below” outstanding. But back under 2101.50 would target 2098.50.