Posts by Rod David
Mid-day Update… Not so fast.
Fresh highs retesting the rally’s target.
The open’s surge to 2606.00 had reacted down to test 2593.00. That reaction down overlapped the morning’s 2595.75 bias-up target at 10:15 to avoid renewing the bias-up signal. It was still a bias-up environment, but that was also a pretty significant reversal. Reinforcements were inhibited, and the balance of the morning ranged sideways.
Extending higher into the noon hour probed fresh highs attacking 1614.00. Its reaction down to 2605.00 was still overlapping this afternoon’s 2608.50 bias-up signal at 1:20. And it was still being overlapped at 1:30. This is a noN-bias environment — no requirement for the bias-up signal to hold its test, and no requirement for its 2615.50 bias-up target to be met.
Back above 2611.50 would signal that upside momentum had resumed, presumably to test the 2615.50 bias-up target anyway. Potentially, there is also room for noise above 2606.00 up to 2626.00 before beginning to suggest that 2656.00 may come into play. Back under 2601.50 would signal another attempt to reject today’s test of 2606.00.
Look ahead: Economic Calendar – for Wed Jan 16, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar is busy, but none of its items is reliably influential to price action. Not until the afternoon’s Beige Book release, which is high-profile so that any surprises can generate a reaction.
MBA Mortgage Applications
7:00 AM ET
Retail Sales
8:30 AM ET
Import and Export Prices
8:30 AM ET
Redbook
8:55 AM ET
Business Inventories
10:00 AM ET
Housing Market Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Neel Kashkari Speaks
1:00 PM ET
*Beige Book
2:00 PM ET
Treasury International Capital
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2608.25 | 2608.50 |
| …would target | 2615.25 | 2615.50 |
| Bias-down: under | 2594.75 | 2595.00 |
| …would target | 2587.75 | 2588.00 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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… The picture comes alive.
Upside target met, meets downside reaction.
Retracing the overnight 20-point rally to 2600.25 had come within 1 tick of the 2580.00 earlier Globex low. 
Before the open. The open was greeted 5 points higher, making the Globex-flip setup unlikely to try forming.
Immediately rallying post-open became a Running Correction as overnight highs were recovered. It launched a surge to 2607.00, fulfilling the rally’s next higher objective at 2606.00. A collapse began several minutes later and extended to retrace the Running Correction’s 2593.00 low.
Bias-up triggered easily. But renewing the signal above its 2595.75 bias-up target failed at 10:15, despite having probed it by 11 points just several minutes earlier. This is still a bias-up environment, so the bias-up target can be exceeded again and the rally could even resume. But either is always difficult when buyers have gotten ahead of themselves.
We’ve expected a fresh high to test 2606.00, which it did. We’ve expected that probing fresh highs would be tenuous if attempted, which it was and it is. No matter how much we expect that to result in a peak, nothing prevents trying to probe higher and delaying a reversal down.
The First Trade & Pre-open Tour Recording… Getting on with it, one way or the other.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Monday’s session wasn’t much different than Friday. Both sessions can be defined as gapping down and then trending back up. Monday’s gap down to 2575.50 reacted down 4 points but stopped more than 3 points above Sunday night’s low, and quickly reversed up to 2588.00. The impatient optimism inhibited reinforcements, and its early momentum peak barely attacked 2590.00 during the afternoon. A late dip touched 2580.00 into the close.
Overnight action’s new info…
Globex initially ranged narrowly at 2580.00 but soon began trending back up. Hovering pessimistically short of Monday’s highs suddenly spiked up to 2595.00, and ranged flat-to-higher through midnight up to 2598.00. Another spike up pierced 2600.00, and all recent highs. Almost all of which has been traced. Reversing down into and out of Europe’s opens eventually attacked 2585.00. Its retest launched a bounce back above yesterday’s highs to 2592.00, which just collapsed 10 points to probe back under 2582.00.
If, then… (notes to accompany the Tour recording)
Throughout the past week’s ranging, this stage of the pattern has remained likely to probe fresh highs. Structurally, at least probing above prior highs. Calculably, to at least 2606.00. Overnight would suffice, but intraday is always preferable. Friday’s failed attempt at completely recovering from gapping down began undermining the likelihood of fresh highs with a vulnerability to just collapsing into a new downleg. More so after Monday’s similar pattern. Last night’s action isn’t optimal, but could suffice for a fresh high, and the pattern remains vulnerable to collapse. Not already collapsing into Tuesday’s open remains likelier to probe fresh highs, perhaps also 2606.00. Meanwhile, the overnight round-trip is threatening the 2580.00 earlier Globex low, after having probed above the prior session’s high, which could form a bearish Globex-flip setup. (I describe the Globex-flip setup in the Market Tour.)
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2590.75 would be likely to trigger the 2588.00 bias-up signal at 10:15. Exiting the open under 2584.25 would be unlikely to trigger bias-up.