Posts by Rod David
Mid-day Update… 3 steps forward, 1 step back.
Is today’s dip only a healthy correction?.
Rejecting the test of this morning’s 2149.25 bias-up signal through 10:15 had put into play an
offsetting test of the 2141.00 bias-down signal.
2141.00 was tested down to 2139.50. Only 1-minute RSI diverged positively, but 3-minute RSI was making a higher oversold low after leaving oversold territory. Its reaction spiked up to 2141.00.
Price has only eked higher since then. The path down had been interrupted by ranging between 2143.50-2148.00. Now that range has been tested as resistance.
Back above 2144.00 and 2145.50 would be so far removed from the morning’s low that its downward momentum could be marginalized. That wouldn’t in itself require a recovery, no earlier than late-afternoon since no traction was gained yesterday.
Triggering the 2147.25 bias-up signal is possible, but not necessary to produce another new highs — for which fresh session lows may be the only deterrent.
Look ahead: Economic Calendar – for Thu Jul 14, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: I’m not sure whether Bullard’s symposium will influence price action, or if so then how. Two other Fed speakers eclipsing the noon hour are likely get a reaction.
Patrick Harker Speaks
WED 6:00 PM ET
BOE policy statement
7:30 AM ET
James Bullard Speaks
Day 1 of two-day meeting of the Official Monetary and Financial Institutions Forum
Jobless Claims
8:30 AM ET
*PPI-FD
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*Dennis Lockhart Speaks
11:15 AM ET
*Esther George Speaks
1:15 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 | 2154.00 | 2147.25 |
| …would target | 2159.25 | 2152.75 |
| Bias-down: under | 2146.25 | 2139.75 |
| …would target | 2141.00 | 2134.25 |
| 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… Crack.
Late surge’s gap up crumbles through the open.
Yesterday’s 2149.25 high was touched so near the open that its sponsorship was a little suspicious. A surge up to 2152.25 probed it, but in a singular non-complex leg. Still, the pattern of gaps up marginalizing sellers got a benefit of the doubt.
But that pattern was never exploited post-open. The 2150.75 opening print quickly slid back into negative territory at 2143.50. Bias-up failed so no-bias triggered, putting into play an offsetting test of the 2141.00 bias-down signal.
Choppy ranging since then has touched 2148.00. Back under 2145.25 would signal the 2141.00 bias-down signal’s test is underway. That would be invalidated by exiting the bias environment above the open’s 2151.75 high before printing a fresh post-10:15 low.
Pre-market Tour (recording & summary)
Like a formulaic battle movie, the cavalry has arrived at the last minute. Earlier peaking pessimistically short of touching yesterday’s 2149.25 high, now a 6-point surge from 2146.00 is testing 2152.00. A gap up is indicated, which once again is the only credible path to producing a durable rally this morning.
Of course, late sponsorship is not the most credible. I’ll give it a benefit of the doubt since we’re at day-11 of an up/down-crash setup that is vulnerable to upside capitulation. But I’ll also be sensitive to signs of failure — for the very same reason.
Details and other markets coverage are discussed in the pre-market Tour recording here.