Posts by Rod David
Mid-day Update… Still in the woods.
Post-open bounce didn’t gain any traction.
Surging to within 1 point of the 1834.50 bounce potential didn’t prevent exiting the bias environment 11 points under the 1818.50 open. That was a test of the critical 1807.50 level whose break through the open would have resumed the decline.
It still might.
Bouncing to retest 1818.50 held. Exceeding it would have targeting 1825.25, whose recovery could target new session highs at 1850.00 and higher.
Meanwhile, a reaction down is testing 1811.50. It might hold, too. But exceeding it would target the 1797.25 area. And any lower (which would then be likely) would resume the decline.
PROGRAMMING NOTE: I’m changing locations which should have a positive impact on bandwidth, which has suffered this morning in the chaRTroom.
Look ahead: Economic Calendar – for Fri Feb 12, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open Retail report is high-profile, but not very influential to price action. That said, a market reaction would be likely to repeat on later reports.
Retail Sales
8:30 AM ET
Import and Export Prices
8:30 AM ET
*Rob Kaplan Speaks
9:45 AM ET
Business Inventories
10:00 AM ET
*Consumer Sentiment
10:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1830.75 | 1825.25 |
| …would target | 1835.75 | 1830.50 |
| Bias-down: under | 1814.25 | 1809.00 |
| …would target | 1808.50 | 1803.00 |
| Signal status: NO-BIAS | 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… Reloaded.
Did the bounce refuel sellers?
Opening action surged instead of retesting overnight lows. Potential up to 1834.50 was attacked to within 1 point, taking RSIs overbought.
That has been steadily retraced to signal further reaction coming. Its 1815.25-1817.00 target has been fully tested. Breaking under it would all but target a retest of overnight lows. And retesting overnight lows would all but resume the decline.
Why is it possible again to resume the decline? Not already extending down at the open had made a reaction up likely. That was because of the difficulty attracting sponsorship at that stage. But now a bounce is reacting down. And the bigger challenge has become attracting sponsorship to stop the trending underway.
Attention is turning from price to time. Not timing windows, but time remaining for liquidity. And not just the week’s remaining liquidity which is usual for Thursday mornings, but also the illiquidity of a three-day holiday weekend.
Breaking lower through the bias environment’s exit could become increasingly ugly through the afternoon. Otherwise, already rallying again would target 1850.00 and possibly much higher.
Pre-market Tour (recording & summary)
The most bearish element of the open is not the substantial gap down currently indicated, because it’s still the product of only one timing window. It’s not the relentlessness of the overnight decline, because that’s often reversed post-open from support. And it’s not the proximity to prior lows.
The most bearish element off the open is the pre-open bounce. Spiking down momentarily to touch 1802.50 had reacted up initially to 1818.50. That was awhile ago, and it has been pierced by 1 point, but not extended.
So, not only has room been created to attract another downleg, but the bounce isn’t attracting sponsorship for extending higher. At least, not yet. A post-open surge would be credible for extending higher this morning. Otherwise, at least a retest of the low is likely.
Details and other markets coverage are discussed in the pre-market Tour recording here.