Posts by Rod David
Mid-day Update… What could possibly go wrong.
Productive trend, targets met, RSIs diverging… wait, what?
Consolidating through the bias environment’s end had formed a reliable accumulative pattern. It broke higher through 1910.00 to fulfill the 1913.00 objective. It extended higher through there to fulfill this afternoon’s 1919.75 bias-up target (by 1 tick).
The accumulative pattern’s corrective phase is biased upward. That reflects optimism, which tends to be sorely missed when new highs are probed. So far, that issue isn’t bothering the pattern’s breakout. But RSIs are deteriorating quickly.
Back under 1915.75 would start to signal momentum reversing down. Back under each prior would confirm. Exiting Friday afternoon’s bias environment by counter-trending can be pretty powerful before the close. But don’t get caught short of the bias environment exit is probing fresh highs.
Look ahead: Economic Calendar – for Mon Feb 1, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s post-open ISM report is reliable for influencing price action. Any reaction to the pre-open reports is likely to repeat for ISM.
Personal Income and Outlays
8:30 AM ET
Gallup US Consumer Spending Measure
8:30 AM ET
PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1920.50 | 1913.75 |
| …would target | 1926.50 | 1919.75 |
| Bias-down: under | 1911.25 | 1904.50 |
| …would target | 1905.25 | 1898.50 |
| Signal status: BIAS-UP | 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… Got there.
Fresh high finds resistance.
Opening at the 1893.50 bias-up signal extended higher almost immediately into a congestion around the 1898.50 bias-up target. Surging out of it to 1907.00 was extended up to 1911.50.
That’s above Wednesday’s 1910.00 prior high. And that’s where early strength risked reversing down hard. That was especially a risk from 1913.00, but it wasn’t touched. And its reaction down was delayed.
So, a pullback to 1902.00 is now trying to recover. Perhaps even to resume the rally, next targeting 1913.00. Otherwise, back under 1902.50 would target 1898.50 for a last chance to resume rallying today.
Pre-market Tour (recording & summary)
Support at the 1893.50 bias-up signal was probed more aggressively in reaction to GDP. But its blip-down to 1888.00 reacted back up into the range, again attacking the 1898.50 bias-up target. The burden of proof is on sellers above 1891.50.
Details and other markets coverage are discussed in the pre-market Tour recording here.