Posts by Rod David
Mid-day Update… Roomy noise.
Noon hour’s highs have yet to extend.
We discussed after yesterday’s close how the session’s specific contradictory signals were suggesting a very wide-ranging session today.
Already swinging widely this morning doesn’t mean that’s necessarily done. 
Neither does already fulfilling the 2143.00 objective, and its room for noise above that begins at 2147.25.
Today’s pattern has so far duplicated yesterday’s — Reacting down from a gap up, then recovering to new highs during the noon hour, triggering no-bias. Similar setups that appear sequentially should resolve differently. Yesterday afternoon only range sideways, so today should either reverse down, or else extend up.
That latter option is problematic. Being a no-bias environment, trending up would be “no-bias trending” that is doomed to failure. The noon hour has created a Complex Ascending Triangle pattern that can function as a Double Top reversal.
Fresh highs could test 2151.25-2152.75 before reversing down. And having stretched the rubber band, that would reverse down substantially if the rally doesn’t intend to put higher targets into play.
A shallower reversal down could still recover 2143.00 through the close to create higher objectives. Reversing down first isn’t required, or reversing down from only slightly higher highs — but that would be likelier to dip only briefly.
Look ahead: Economic Calendar – for Wed Jul 13, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday morning’s econ reports have no track record for influencing price action, but a reaction to either pre-open report would be somewhat likelier to repeat after the Atlanta Fed. Crude Oil’s EIA report always triggers a reaction, but not necessarily durable. The noon hour ends with the 30-year auction (usually done on Thursdays), which tends to inhibit price action before even a successful result. The afternoon’s Beige Book has much the same effect, inhibiting price action until it reacts to the data.
Neel Kashkari Speaks
TUE 5:30 PM ET
Loretta J. Mester Speaks
TUE 10:30 PM ET
MBA Mortgage Applications
7:00 AM ET
Import and Export Prices
8:30 AM ET
*Robert Kaplan Speaks
9:00 AM ET
House Ag committee – CFTC auto-trade proposal
9:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
*Beige Book
2:00 PM ET
Treasury Budget
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2155.00 | 2148.00 |
| …would target | 2161.75 | 2155.00 |
| Bias-down: under | 2147.00 | 2140.25 |
| …would target | 2142.00 | 2135.00 |
| 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… Testing another objective.
Rally’s next objective met, holding.
The open was greeted by a a 4-hour channel ranging around this morning’s 2141.00 bias-up target. Immediately breaking higher extended to 2145.25, neutralizing the rally’s next higher objective at 2143.00.
The entire opening 15 minutes of volatility trended up 4-1/2 points. Price action since then has only trended down 7 points, and just attacked 2138.00.
While the reversal down has dipped deeper and lasted longer, it can’t change history. And trending higher after gapping up created an anchor to prevent a reversal down from gaining traction.
That doesn’t prevent attempting to trend down. The bias-up target held through 10:15 to avoid renewing the bias-up signal. But this is still a bias-up environment. Dipping during it has room down to the 2135.00 bias-up signal without even threatening to reverse the trend down.
Back above 2142.50 would start to signal the dip had ended and the rally was resuming. Meanwhile, further backing-and-filling through the morning or later remains possible.
Pre-market Tour (recording & summary)
The open is being greeted by a 4-hour channel between 2139.00-2141.50. At this point, Testing the 2141.00 bias-up target for so long doesn’t ensure it being exceeded durably by post-open highs. But that would open the door to a much bigger rally today instead of backing-and-filling through the noon hour.
Details and other markets coverage are discussed in the pre-market Tour recording here.