The first trade...Getting its bearings

October 26, 2015 08:50 AM

Through the prior close...

Already firming after Thursday's session-long rally, surging in reaction to China's rate cuts created a peak at 2074.75. Reacting back down to 2056.75 bottomed when the morning's bias environment began lapsing. That was still above Thursday's highs. Rallying into the final hour attacked the pre-open high up to 2073.50..

Overnight action's new info...

Friday last hour had softened into and out of the close to 2066.00. The deterioration resumed at Sunday night's open, drifting down to 2061.00. A dip down to 2057.50 has reacted back up to 2064.00.

If, then...

Friday confirmed Thursday's breakout. At least an eventual third higher close is required. Reversing down immediately -- as overnight action suggests is the intent -- would be considered only a temporary correction. None of which may prove relevant today, since overnight weakness so far has been contained within Friday's range as only noise.

First Trade...

Exiting the open at 9:45 above 2069.00 would be unlikely to trigger the 2063.50 bias-down signal at 10:15. Exiting the open under 2059.75 would be likely to trigger bias-down. Exiting the open under 2055.50 would be unlikely to recover the 2058.50 bias-down target by 10:15, which would renew the bias-down signal.

About the Author

Rod David develops analytical techniques that are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He primarily analyzes S&Ps, generating several round-turn candidates daily. Rod publishes "Trading Plan" and more each session at the blog http://IfThenSignals.com.