Posts by Rod David
Mid-day Update… Icarus is jealous.
Weak base, premature rally, targets met, noN-bias. What’s the hold up?
Complexity associated with last night’s 2116.25 high required its intraday retest, which is done often the same day. It was met this morning as the bias environment began lapsing.
Also met is this morning’s 2117.00 bias-up target. Its test has room for noise up to 2119.00, and a higher objective would be in-play at 2125.25. The 1:20-1:30 bias timing window didn’t confirm momentum remains intact, since its 2017.25 bias-up signal was still being tested to trigger noN-bias.
So, two influences are competing against each other. Nothing will alter that this morning’s rally originated from a weak foundation. Meanwhile, the post-open uptrend of higher highs and higher lows remains intact. Upside momentum can’t afford to lapse after having neutralized upside attractions, because its first stumble could be its last.
Look ahead: Economic Calendar – for Wed Jun 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s Jobs Opening report offers the first chance since Friday to compare its payrolls report to other data. So, it often influences price action. Meanwhile, although Crude Oil is no longer matching the market tick-for-tick, a knee-jerk reaction to reports is still likely.
MBA Mortgage Applications
7:00 AM ET
*JOLTS
10:00 AM ET
Quarterly Services Survey
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2118.75 | 2117.25 |
| …would target | 2123.75 | 2122.25 |
| Bias-down: under | 2112.50 | 2110.75 |
| …would target | 2104.50 | 2103.00 |
| Signal status: noN-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… Don’t get used to it.
Bias-up triggers, but not in a supportive context.
Post-open action has trended up. Gradually, if not painstakingly, but up. Bias-up triggered. And it has extended several points already to 2115.50. So, why is this bearish?
Context.
Yesterday’s rally didn’t gain traction for its effort. So, resuming the rally this morning required gapping up above yesterday’s 2112.25 high. But today’s entire first half-hour fluctuated at or under 2112.25 before extending higher.
The late start doesn’t preclude trying to extend the rally this morning. It just makes it vulnerable to reversal. Without recovery.
This doesn’t detract from the very valid bias-up signal that triggered above 2111.50. A fresh post-10:15 high just printed, making the 2117.00 bias-up target likely to be met sooner rather than later. And its test could visit 2119.00, too.
Counter-intuitively, a bullish template would find an excuse to dip. Leaving “unfinished business above” is a safety tether that can guide a later recovery by strong-handed sponsorship. Otherwise, already satisfying upside attractions would more likely start a topping process.
Pre-market Tour (recording & summary)
The opportunity to gap up above yesterday’s high appears to have been lost. The reaction down from 2116.00 has extended back under yesterday’s 2112.25 high to 2109.50.
Not gapping up above yesterday’s high would be unlikely to resume the rally this morning. Trying to resume the rally prematurely would be likely to react down more durably. Add in a test of the 2111.50 bias-up signal or even a test of the overnight 2116.25 new Globex trend extreme, and a collapse would not be far behind.
Counter-intuitively, the most bullish scenario would avoid touching the bias-up signal. This would at least avoid putting into play an offsetting test of the bias-down signal, so the morning could wait out the next window available for trending.
Details and other markets coverage are discussed in the pre-market Tour recording here.