Posts by Rod David
Mid-day Update… A resistance too far.
Bounce potential more than fully satisfied.
Actually, the bounce underway could extend next to 2052.00. But that would really be pushing it. Just testing 2040.00 and its room for noise up to 2041.50 sent price down to 2030.50. Its noon hour recovery probed nearly 2 points above the afternoon’s 2044.00 bias-up target.
The bias-up target wasn’t rejected entirely — 1:20’s bias timing window only attacked the 2038.25 bias-up signal as support. And it was only being overlapped at 1:30. Pierced, yes, but overlapped.
That reaction down has extended to 2036.75, and it’s probably targeting 2034.25. Probing under the bias-up signal isn’t unusual, this being a bias-up environment whose target has been met. But the 2038.25 bias-up signal still should be revisited.
It’s no longer premature for trending to be inhibited by its proximity to tomorrow’s FOMC policy statement. The balance of the session could still range choppily, but likely only range or temporarily probe its fringes.
Look ahead: Economic Calendar – for Wed Dec 16, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: This is it. The rate hike that will be heard around the world. Or, the inability to hike rates, which will be heard around the galaxy. As if that hype and anticipation weren’t enough to ensure a lively reaction to Wednesday’s FOMC policy statement. There’s also Yellen’s quarterly Q&A press conference following it.
MBA Mortgage Applications
7:00 AM ET
Housing Starts
8:30 AM ET
Industrial Production
9:15 AM ET
*PMI Manufacturing Index Flash
9:45 AM ET
EIA Petroleum Status Report
10:30 AM ET
**FOMC Meeting Announcement
2:00 PM ET
FOMC Forecasts
2:00 PM ET
**Fed Chair Press Conference
2:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2046.50 | 2038.25 |
| …would target | 2052.00 | 2044.00 |
| Bias-down: under | 2039.50 | 2030.50 |
| …would target | 2034.50 | 2025.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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… Entrenched optimism.
Post-open surge creates safety buffer.
Pulling back pre-open several points under 2032.00-2033.00 resistance was reversed back up immediately to attack 2038.00. That was the only way to extend the gap up in this pattern. Ultimately the next higher objective at 2040.00 was tested up to my highest calculable resistance at 2041.50. Its reaction down has touched 2034.50.
There is no requirement to trend any higher than the 2040.00 test. Overbought RSIs at the high require a retest, but its current reaction down can extend to 2032.00-2033.00 first.
Pre-market Tour (recording & summary)
The overnight rally to 2027.00 reacted to the 8:30 econ reports by surging to 2033.25. That fully tests the 2032.00-2033.00 resistance that lies along the path to testing 2040.00.
A corrective dip could end as shallowly as 2026.00, or test 2024.00. I would consider selling a post-open test of 2032.00-2033.00 that is signaling failure, or else not without breaking under 2022.50. Dipping deeply enough pre-open could accelerate the rally’s resumption, but the only other credible rally would barely look back down while surging post-open.
Details and other markets coverage are discussed in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/vsxtcmh