Posts by Rod David
Mid-day Update… Session-long, after all?
Relentlessly higher highs following the setup’s template.
Having trended down into the prior session’s close, gapping up above its afternoon bias environment high can form a “session-long setup.” All but one intraday timing window would then probe its prior timing window’s high.
That exception tends to be the noon hour, or else the last 60-90 minutes.
Occasionally, the exception is the morning’s bias environment. But not today, after it extended the post-open 6-point surge from 2108.00 another 7-9 points to 2121.00 and 2123.00. And it’s not the noon hour, which immediately probed a fresh high.
All of which assumes this is a session-long rally. It may be, but developing with an interim weekend is not reliable. Nevertheless, we’ll still tack the timing window template.
Price action since the noon hour’s initial surge has ranged flat to lower, only slightly lower, testing 2122.00. A deeper pullback could end at 2118.25 or fall to 2113.50, and still not signal the trend reversing down. Probing a fresh high during this current bias environment would enable raising the sell signal, but not the potential attraction’s below.
Complying entirely with the template for a session-long rally wouldn’t make its other features any more reliable. But I should note that when the setup’s timing windows do extend correctly, the following morning tends to probe higher, too.
Look ahead: Economic Calendar – for Tue Nov 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Voting results won’t be available until nighttime, but independent exit polls could leak their way into price action. There is no other distraction from Tuesday’s calendar, which contains a couple of influential items. JOLTS is an opportunity to confirm or invalidate Friday’s Employment Situation report — fine-tuning it isn’t likely to be influential. The noon hour’s Fed speaker may have impact, too.
NFIB Small Business Optimism Index
6:00 AM ET
Charles Evans Speaks
7:45 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
*Charles Evans Speaks
12:20 PM ET
3-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2128.75 | 2123.75 |
| …would target | 2133.75 | 2128.75 |
| Bias-down: under | 2123.25 | 2118.25 |
| …would target | 2118.00 | 2113.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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… Onward, upward, etc.
Gap up maintained, extended.
The open’s immediate bobble held a quick test of the 2108.75 pullback limit before extending back up to and through the 2111.00-2112.00 overnight highs. Sellers are likely marginalized for at least the morning.
A running correction / rising wedge formed up to 2114.00. The pattern was entered and exited aggressively, then forming a potential plateau. Dipping back down into the wedge to 2112.00 could refuel the rally, but any lower could reverse the uptrend.
Avoiding any pullback from the plateau, and instead extending higher, could marginalize sellers for another 1-2 uplegs. That would easily get to and through 2120.00-2121.00, if not also to 2134.00 and 2138.00.
The plateau is actually resolving up now. The next opportunity for correcting down temporarily is likely from 2120.00-2121.00.
Pre-market Tour (recording & summary)
The open is being greeted by firming back to the overnight range’s upper-end, attacking 2111.00-2112.00. Just holding 2108.75 should keep the bias upward, and also begin a corrective rally. Otherwise, the attraction to Thursday and Friday’s “lower prior highs” at 2094.00-2097.50 could come into play.
Details and other markets coverage are discussed in the pre-market Tour recording here.