Posts by Rod David
The longest yard.
Rally back within proximity of being more than a corrective bounce.
I pointed out before the open that the overnight rally had held precisely at a 61.8% retracement of yesterday’s intraday decline. That natural resistance launched a reversal back down to the bounce’s origin. And through it.
Having probed under the bounce’s origin — i.e. yesterday afternoon’s low, if not also under the overnight low — recovering above their interim high would indicate more than a corrective bounce.
And the overnight high’s 1957.75 corrective bounce peak has been attacked to within 2-1/2 points at 1955.25.
That attack is during an invalidated no-bias environment, which broke above the 1944.75 through 1:30, after failing to trigger it at 1:20. Exiting the bias environment at 2:30 above its 1949.75 bias-up target would earn the late buyers the same credibility given to Tuesday afternoon’s late buyers (who sponsored a 40-point rally).
But exiting the bias environment under 1949.75 would undermine buyers. And back under 1946.75 would start to signal momentum reversing down. Other support could prevent resuming yesterday’s decline, but the recovery would have become very suspect.
Look ahead: Economic Calendar – for Fri Sep 11 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Two ends of the economic spectrum provide snapshots Friday morning, the pre-open Producer Price Index and post-open Consumer Sentiment. They’re both high-profile, with reliable track records for influencing price action.
*PPI-FD
8:30 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 | 1956.25 | 1944.75 |
| …would target | 1961.25 | 1949.75 |
| Bias-down: under | 1946.50 | 1935.00 |
| …would target | 1940.50 | 1929.00 |
| Signal status: NO-BIAS INVALIDATED, BIAS-UP SIGNAL EXCEEDED | 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… Deja voodoo.
Overnight rally repeats post open. Will the overnight rally’s failure repeat, too?
The pre-open drop seems to have repeated the decline’s mistakes of yesterday afternoon. It neutralized objectives below at the 1922.75 and 1928.50 bias-down parameters. And it did so by plunging aggressively after already having dropped 30 points from the overnight high. Capitulation without any lower attractions made it easier for price to rise, simply for lack of selling.
The open’s surge to attack 1937.00 was retraced to 1925.00 before resuming the rally. But the 1928.50 bias-down was recovered through its grace period, putting into play an offsetting test of the 1939.50 bias-up signal. That extended to the 1945.50 bias-up target.
Rallying 20 points in 45 minutes resembled the overnight rally. Exploiting the same conditions that the overnight rally had exploited. So, will the overnight rally’s failure repeat, too?
Already, the rally has retraced 13 points down to 1931.50. That’s testing yesterday’s 1931.00 cash session close. And that’s natural support.
So, it’s likely that one or the other is done, either sellers or the corrective bounce. Back above the open’s 1937.00 resistance would make the recovery credible for extending higher. But back under this morning’s 1928.50 bias-down signal could unleash new lows.
Pre-market Wrap… More lemons from lemonade.
The overnight rally to 1957.75 had been retraced already to probe negative territory under 1931.00-1933.50. Then it extended down to 1919.00, fresh lows under 1926.50 and 1924.00 (yesterday’s low and the overnight low, respectively). That also tested this morning’s 1922.75 bias-down target.
Before getting too bearish on all of that, let’s note that its reaction up has threatened the 1928.50 bias-down signal. Not holding 1926.50 through 9:45 would make it likely to trigger 30 minutes later at 10:15. So, recovering 1926.50 through 9:45 should be take seriously for its potential to rally sharply through the morning.
There’s nothing bullish about triggering bias-down. Details and other markets coverage were discussed during the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/fbkymwy