Posts by Rod David
Mid-day Update… Looking for sponsorship.
WedEX is done, no matter how aggressive its product.
The bullish WedEX’s influence on this morning is obvious. Recovering from a deep gap down is irrelevant. But rallying 18 points from 2066.00-2084.00 still doesn’t reflect the rally’s strength. Its buy signal at 2068.25 didn’t violate a pullback limit before touching 2087.00 during the noon hour.
Pullback limits were tested, but never probed deeper than their first 3 minutes. Even the mid-morning Symmetrical Triangle that broke falsely down was still so shallow that its pullback limit held before reversing back up more substantially.
The bullish WedEX’s influence is done. It would have no predictive value by having been any more or less aggressive and productive. But the morning’s singular sponsorship is very revealing. It suggests that reacting down would be only temporary, and recovered by a new upleg with greater measurements than this morning’s upleg.
One caveat is that this morning’s rally must not be rejected by the close. Probing above Thursday’s 2079.75-2081.75 highs must hold as support. Closing in negative territory back under 2073.50-2074.75 would reverse momentum down. Overbought RSIs at the noon hour’s high don’t require a retest, but that does make reversing down more difficult.
Look ahead: Economic Calendar – for Tue Apr 19, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Intel’s earnings come after Tuesday’s close, which might inhibit afternoon volatility. A lot of insurance companies report before the open. Othewrise, the econ calendar’s items have no track record of influencing intraday price action.
Eric Rosengren Speaks
Mon 7:00 PM ET
Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2091.25 | 2085.00 |
| …would target | 2097.00 | 2090.75 |
| Bias-down: under | 2083.25 | 2076.00 |
| …would target | 2077.25 | 2071.00 |
| Signal status: waiting for trigger | 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… Aggressively bullish, indeed.
Post-open action wastes little time before surging. And surging.
The bullish WedEX’s influence Friday afternoon was modest. It reversed a probe of fresh lows to recover at fresh afternoon highs. And having been modestly influential Friday afternoon, its influence this morning was likely to be aggressive.
In fact, the 2066.75 opening print reacted down only 6 ticks during the next minute, before reversing up sharply. The 2071.75 bias-up signal was being tested by 9:45. Surging into and out of 10:00 had extended to 2079.00. That has extended to 2081.25.
Regardless of its starting point being a gap down, 14 points in a half-hour is aggressive and bullish. But it’s not yet morning-long, which is still under WedEX’s influence.
Meanwhile, a new challenge has appeared. The open tested the 2067.50 bias-down target and recovered the 2071.75 bias-down signal. Just holding the bias signal’s test through 10:15 would put into play an offsetting test of the other bias signal. Recovering a bias signal and its target, would put into play tests of both of the other bias parameters.
But the consequences for ineffectual pessimism are neutralized already. Testing this morning’s 2078.50 bias-up signal is now the focus. And at 10:15 it was still being overlapped to invoke the grace period.
So, the 2085.75 bias-up target is in-play because the 2078.50 bias-up signal was recovered through 10:30. Its test at least attack is likely anyway, with influence from the bullish WedEX. Only dipping back under 2076.25 would raise any suspicion otherwise.
Pre-market Tour (recording & summary)
The reaction down from 2072.75 has dipped to 2065.50. A 4-point bounce has been retraced entirely back down to 2065.50. Rallying should be obvious no later than the first 3-5 minutes or at least halfway through the opening 15 minutes of volatility. But not yet rallying by then, or actually trending down, could invalidate the bullish WedEX.
Details and other markets coverage are discussed in the pre-market Tour recording here.