Posts by Rod David
Mid-day Update… Cornering.
Morning forms Pivot Reversal setup.
Yesterday’s last-minute surge had originated too late to be sponsored by strong hands. It wasn’t bullish. It may have been bearish, by making a gap down easier, and easier to absorb.
Absorbing a gap down is bearish?
Absorbing the gap down was reversed it to probe back above yesterday’s late high. That’s not bearish, unless rejected. And this morning’s recovery was rejected.
Exiting the bias environment under the open’s low at 2180.50 has trapped weak-handed buyers. This setup often launches a reversal. Entering the noon hour under the bias environment low would have been helpful, but that didn’t happen.
The noon hour did probe fresh lows down to this morning’s 2177.75 bias-down signal. Its reaction up to 2182.00 has avoided triggering bias-down again today. Back above 2182.00 could retest this morning’s high up to 2187.00, just as noise. Sellers are already entrenched.
Back under 2170.00 would signal the decline is already resuming. At this stage, that could be very bullish, instead.
Look ahead: Economic Calendar – for Thu Sep 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The holiday-shortened week delays the EIA Petroleum report by one day, and by one half-hour, but should still impact Crude Oil.
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Quarterly Services Survey
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*EIA Petroleum Status Report
11:00 AM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2188.25 | 2187.00 |
| …would target | 2193.25 | 2192.25 |
| Bias-down: under | 2178.00 | 2177.00 |
| …would target | 2172.25 | 2171.50 |
| Signal status: NO-BIAS | 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… Tough crowd.
Pre-open pullback temporarily recovers.
The gap back up to yesterday’s 2185.50 cash session close was likely to be filled, regardless of its resolution. Regardless of post-open weakness, the gap was likely to be filled, if not also probed, since yesterday’s late surge to 2186.25 had not been rejected overnight. That would still be vulnerable to reversing down.
Actually, a shallow post-open dip to 2181.50 was recovered to only touch 2185.50. That didn’t stretch the rubber band very much, and its reaction down was limited to 2-1/2 points, then recovered to fresh highs at 2186.75.
There was room for extending up to this morning’s 2179.00 bias-up signal, just as noise. Regardless of the upside potential, there has been and continues to be a greater vulnerability to reversing down.The closest thing to a requirement was to neutralize the attraction up to 2185.50. Done.
In fact, now an even bigger reaction down just touched the 2181.25 post-open low. Any lower would likely target a test of the 2177.75 bias-down signal. Exiting the bias environment back above yesterday’s 2183.50 could marginalize sellers for the day.
Pre-market Tour (recording & summary)
Overnight action is trying to represent complacency. It’s more likely anxiousness, between its fresh relative high and this afternoon’s Beige Book due. So, I’m not expecting a narrow intraday range.
The narrow overnight range had broken a little during Europe’s opens to pierce yesterday afternoon’s 2183.50 high, but that was recovered entirely up to 2186.25. Now it has broken a little lower down to 2181.25, under yesterday’s high.
Yesterday’s cash session close equates to 2185.50, and the gap back up to it will want to be filled. Filling it and then probing a fresh post-open low could serve to reverse momentum down. Sharply. Filling the gap and holding positive territory could instead rally for the morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.