Posts by Rod David
Mid-day Update… Hover, or hide.
No-bias doesn’t prevent late-rally, but leaves a path down.
The consequence to invalidating this morning’s bias-up signal was to probe a fresh extreme in the opposite direction. So, the 2050.50 opening print was probed to a fresh post-open low at 2048.25. Its attraction was another 3 ticks lower, so it was essentially neutralized.
The reward for absorbing the fresh low was to test 2056.00. That also became this afternoon’s bias-up signal. It was tested and held in time to trigger no-bias, and now the bias environment’s upper-end should be defined by 2056.00.
Hovering here would position the market strategically to resume Friday’s rally when the bias environment begins lapsing. Backing-and-filling could still recover and rally, but probably not from under 2051.00. Similarly, attacking post-open lows would position the market near this afternoon’s 2047.50 bias-down signal for a late-afternoon drop.
In either case, whether resolving up or down would be likely to extend in that direction through Wednesday morning. Rallying through today’s final hour would signal what Friday’s rally didn’t, that the ongoing decline did end at 2030.00. A new downleg today would instead resume the decline, which the limited bounce has maintained.
Look ahead: Economic Calendar – for Tue May 10, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s payrolls report was very influential to price action. The subsequent JOLTS report tends to be influential, too. No other high-profile report is due Tuesday.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
Wholesale Trade
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2062.00 | 2056.00 |
| …would target | 2066.75 | 2061.00 |
| Bias-down: under | 2053.25 | 2047.50 |
| …would target | 2047.75 | 2041.75 |
| 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… Until the bitter end.
Post-open surge still thoroughly tests resistance.
The 2055.00 bias-up signal just triggered. So long as it isn’t invalidated back under 2055.00 through 10:30, it’s entirely capable of testing its 2061.00 target.
2055.00 is being tested now as support. It’s too late to trigger no-bias and to require an offsetting test of the 2041.00 bias-down signal. Not bouncing back above it through 10:30, and no longer overlapping 2055.00 would simply invalidate the bias-up.
Recovering to 2056.00-2057.00, and probing it up to 2058.75, expended a lot of buying pressure. I would have given it a benefit of the doubt if it had extended quickly through 2059.50. But buyers aren’t exploiting that, as now 2052.00 is being tested as support.
Regardless of the bias environment, there is room back down to 2041.00 simply as noise, while waiting for new traction to be gained.
Pre-market Tour (recording & summary)
The overnight recovery’s test of 2059.50 wasn’t rejected immediately. It served for several hours as resistance to a consolidation supported by 2057.00. But it didn’t break higher to serve by proxy as reversing the 2-1/2 week old decline. Rather, a reaction down just attacked 2051.00.
Opening above 2056.00-2057.00 and quickly extending higher could still be credible for extending Friday’s rally. Otherwise, backing-and-filling could test 2041.00 just as noise.
Details and other markets coverage are discussed in the pre-market Tour recording here.