Posts by Rod David
Mid-day Update… Stubborn.
Optimists learning at a glacial pace.
At least this morning’s gap up reversed down immediately. So, optimists are getting a little smarter. Not much, though. Friday’s gap was a little slower to reverse down, but not much. And prior gaps up had extended higher more and more briefly before reversing down.
Negative territory was probed earlier this morning than Friday. But not much. The bias environment had not yet ended today, but Friday’s drop dragged it out before failing.
There’s some sort of a pattern there.
The learning curve doesn’t advance simply by shortening distance between the usual inflection points. Rather, the curve stops repeating, and disappears altogether — replaced by a period of trending more consistently and at a steeper slope.
Unfinished business below at this morning’s 1899.75 bias-down target is now this afternoon’s bias-down target. Probing fresh post-open lows during the noon hour would start to suggest the pattern is shifting to post-optimism. Somehow rallying would suggest something much more substantial underway to the upside.
Look ahead: Economic Calendar – for Tue Jan 12, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s post-open Job Openings report has a track record of influencing price action. The late timing of the afternoon’s Fed speaker could have even more impact than would be expected otherwise.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
*Jeffrey Lacker Speaks
3:15 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1928.00 | 1920.25 |
| …would target | 1933.50 | 1926.50 |
| Bias-down: under | 1914.75 | 1907.75 |
| …would target | 1907.00 | 1899.75 |
| Signal status: BIAS-DOWN | 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… Hope Springs springs another leak
Opening strength evaporates entirely.
The pre-open recovery to the 1928.50 overnight high was pierced up to 1929.00 through the open. That’s 15 points above Friday’s cash session close.
And it’s all optimism.
Any higher would have gotten a benefit of the doubt for renewing the bias-up. Instead, back under 1924.25 signaled momentum reversing down, falling to a fresh low at 1912.25.
Only momentarily overlapping negative territory has kept the door open to another bounce. In fact, an 11-point bounce just touched 1923.25. The eternal springing of hope is astonishing.
Having said that, this is a no-bias environment that rejected tests of both bias-up parameters, putting into play offsetting tests of both bias-down parameters at 1907.00 and 1899.75.
Pre-market Tour (recording & summary)
The recovery’s 1928.50 high is being retested ahead of the open, after an interim dip to 1914.00. Still a little short of levels that would gain traction, so resuming the decline remains possible.
Details and other markets coverage are discussed in the pre-market Tour recording here.