S&P
Right on schedule. If your calendar’s broken.
Repeated recoveries finally being rewarded.
Ongoing dips, both intraday and overnight, continued holding the 2090-2095 band of support, making the difference between correction and reversal.
Last night”s drop was the latest. And perhaps it was the last. At least, the last to recover.
The open behaved as expected for trending upward, but not delaying aggressive upward trending from 2095.25. Its mid-morning consolidation from attacking 2104.00 resolved as was expected if the trend remained up, by surging aggressively to fresh highs. No more pullbacks are needed for refueling the rally.
Now, the shallower the pullback, the steeper the resumption. Having surged to 2109.00, a pullback could attack this morning”s high before recovering. Whether or not this morning”s high is actually touched would all but dictate how much higher the high.
My pullback objective is 2103.75, above this morning”s high. Recovering from there could lead to a serious decline Friday, albeit from still higher highs. But first probing under this morning”s high before extending would likely stretch the rally into next week.
Entering the afternoon”s bias environment back under 2099.00 would be bearish. The trend otherwise remains up. And keep in mind that the reversal down should be abrupt and substantial. So last night”s dip was probably the last to recover.
Afternoon bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2116.50 | 2110.00 |
| …would target | 2123.00 | 2116.50 |
| Bias-down: under | 2106.00 | 2099.50 |
| …would target | 2101.00 | 2094.50 |
| Signal status: BIAS-UP | 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… Ho-hum, indeed.
Overnight plunge recovers into positive territory. Momentarily, at least.
The pre-open stabilization around this morning”s 2095.25 bias-down signal did not require resolving in one direction or the other. But it did suggest that a resolution would be early and aggressive.
In fact, the open momentarily pierced back under 2095.25 then reversed up sharply to 2099.25. News at 9:45 was absorbed on the way to 2103.50.
That”s within 2 ticks of this morning”s 2104.00 bias-up signal. Its test is the consequence of having held a test of the bias-down signal. Just coming within 3 ticks disallows it from becoming “unfinished business above” if left outstanding.
Having said that, new highs remain likely so long as sellers don”t gain traction. And sellers just tried overnight to gain traction and failed.
Sellers are trying to gain traction again. The reaction down from 2103.50 fell to 2097.50. A blip-down touched 2096.25. Back above 2099.00 would signal another attack underway on 2104.00, and higher. Meanwhile, there is no active sell signal.
Pre-open action has stabilized around
Pre-open action has stabilized around this morning”s 2095.25 bias-down signal. It is support, which is why holding it or not through 10:15 would be predictive of the next direction. The resolution should come early and trend aggressively before hesitating. Here”s the pre-market Tour recording for more detail:
https://roddavid10.mitel-nhwc.com/join/jrtcytr
The First Trade… Draining the batteries.
Proper context can start the day with a solid win and make all the difference.
Enter the chaRTroom here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Wednesday afternoon”s “no-bias trending” above the 2098.25 bias-up signal could have been dismissed if buyers had gained traction for the effort. But exiting the bias environment at 2101.50 above the noon hour”s 2098.50 high didn”t attract strong-handed sponsorship. An eventual fresh high attacked 2104.00, but only after the 3:10-3:20 window that would otherwise have extended higher. Instead, it reacted down toward the 2098.25 bias-up signal that had been broken prematurely.
Overnight action”s new info…
Even then, Wednesday”s 2098.25 bias-up signal didn”t require being retraced, since it had not held decisively when it mattered most. But it was soon tested overnight anyway, touching Wednesday morning”s 2097.25 highs. Then the bottom dropped out — again — sliding through Europe”s opens to 2087.50. Its recovery up to 2098.00 has dipped back down to 2093.00-2095.00.
If, then…
Another day, another overnight plunge. So… Another overnight plunge, another intraday recovery? As I detailed during yesterday”s post-market Wrap, that which hasn”t killed the market doesn”t necessarily make it stronger, but it does earn an obligatory probe above the range. This reward for having absorbed so much selling pressure assumes that selling pressure hasn”t first chipped away entirely at support. Either down here, or up there, buyers will find none others remain to be attracted. The obligatory reward for buyers does have a shelf-life, which is less like an expiration date, and more like a battery”s charge. Potential to new highs remains alive so long as the charge”s reading holds above 2090-2095 through every relevant timing window. It”s being challenged again now, and GM and MMM just missed earnings expectations.
First Trade…
Exiting the open at 9:45 above 2097.50-2098.25 would be unlikely to trigger this morning”s 2095.25 bias-down signal at 10:15. Exiting the open under 2090.00 would likely trigger bias-down. Exiting the open under 2088.00 would become unlikely to recover the 2089.50 bias-down target at 10:15, which would renew the bias-down signal.