Posts by Rod David
Mid-day Update… Locked and reloaded.
Pullback sufficient, so it had better end.
The noon hour’s 2140.50 low tested last week’s “lower prior highs.” That’s a natural reaction following a gap up, regardless of the eventual resolution.
A bearish scenario would extend down, whether soon or after failed bounces had chipped away at support. A bullish scenario’s next leg would rally to fresh highs above the open’s 2149.00 peak. Delaying the bullish scenario’s recovery would not take long, and would not return to the lower prior highs.
A bullish resolution remains likely since the opening action created an anchor to enable recovering from a correction. And the correction’s objective has been tested.
This afternoon’s 2141.25 bias-down signal held its test to avoid triggering. There’s room up to the 2147.50 bias-up signal during the no-bias environment. There’s no limitation when the bias environment begins lapsing, but at least 2150.00 should be tested.
Fresh lows wouldn’t necessarily be bearish. Fresh lows AFTER a bounce would not be bullish. But digging a little deeper before trying to recover could still be part of the correction.
Look ahead: Economic Calendar – for Tue Oct 25, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Here come a lot of Housing sector data. But it’s not necessarily influential to price action, unless one is a dramatic outlier, and especially if another were to confirm it. Mario Draghi speaks at some point during the morning, and he is very reliable at influencing price action.
Redbook
8:55 AM ET
FHFA House Price Index
9:00 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
*Dennis Lockhart Speaks
1:20 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2153.75 | 2147.50 |
| …would target | 2158.50 | 2152.50 |
| Bias-down: under | 2147.25 | 2141.25 |
| …would target | 2142.00 | 2135.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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… Anchored.
Gap up maintains high enough and long enough.
The 2145.75 opening print surged to 2147.00 and eventually extended to 2149.00. That didn’t prevent reacting down to test and retest 2144.25. But the 2140.75 bias-up target was exceeded at 10:15 to renew the bias-up signal.
Its renewed bias-up target at 2145.50 was still being tested. That’s actually not so relevant, and just touching 2145.50 has made 2150.00 likely to be tested, too.
Regardless of whether attacking it to within 1 tick is sufficient, the overnight rally is now pretty extended. Meanwhile, the open’s gap up above prior highs was maintained and extended high enough and for long enough to create an anchor that helps to recover from a dip. And a dip back down to last weeks’ “lower prior highs” centered around 2142.25 would help to neutralize its attraction below.
In fact, 2142.25 was just attacked to within 2 ticks. Back above 2146.50 would start to signal the open’s anchor is attracting price back up. Otherwise, lower prior highs could include a test of 2140.75.
Pre-market Tour (recording & summary)
The reaction down from 2147.50 has touched 2143.00. Exiting the opening 15 minutes any lower would make the 2140.75 bias-up target less likely to maintain its recovery, too. And that could lead quickly to an about-face of the overnight rally. Otherwise, 2150.00 is the essentially next higher objective for a renewed bias-up signal.
Details and other markets coverage are discussed in the pre-market Tour recording here.