Posts by Rod David
Waiting it out.
Noon hour bounce fails to gain traction.
The morning’s 1944.00 objective was touched precisely. That wasn’t necessary, only that it be overlapped. Nevertheless, it was recovered to attack 1956.50. That was the noon hour’s high, and now its reaction down to 1947.50 has avoided triggering this afternoon’s 1952.25 bias-up signal.
That sums up the afternoon — no downside requirement, and an upside seemingly content with trading well into positive territory for the day.
None of which prevents or even prohibits extending down much deeper. Holding 1952.00 earlier would have been optimal to a pullback. In actuality, that was probed 5 points. So, either the pullback rubber band has been stretched unnecessarily tight (which should be proved by surging higher), or it’s about to break lower.
Look ahead: Economic Calendar – for Wed Sep 9 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s JOLTS report has become as reliably influential to price action as the prior week’s Employment Situation report, itself. But there isn’t any other report to leverage a reaction.
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
Quarterly Services Survey
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
*10-Yr Note Auction
1:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1954.25 | 1952.25 |
| …would target | 1959.75 | 1957.75 |
| Bias-down: under | 1947.00 | 1945.00 |
| …would target | 1940.75 | 1938.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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… Sentiment extreme, after all.
Pre-open dip extends too low and for too long, but is that phase done?
As we discussed during the pre-market Tour, resuming the overnight rally above 1961.00 would be likelier if its reaction down could stay away from 1952.00 or at least reject its test quickly. It did neither.
But the test of 1952.00 did eventually try to recover. It peaked at 1959.25, whose recovery would have confirmed the pre-open dip had failed. Testing its resistance so late served a different purpose, reversing down to fresh lows under 1950.00.
The consequence to a sentiment extreme was a pullback to 1944.00. Not suffering the consequence this morning would have required a deeper consequence later. But 1944.00 has been touched, offsetting the extreme sentiment’s optimism with pessimism.
Exiting the bias environment under the low of 1944.00‘s test (which happens to be 1944.00) would suggest the that a deeper consequence lay in store, anyway. Meanwhile, the nearest buy signal is currently 1950.50.
Pre-market Tour
The pre-market Tour is presented live in the chaRTroom at 8:55am ET. The link to its recording is sent when available, with a summary of the opening strategy…
The overnight rally to 1961.00 has reacted down to 1950.00. Post-open action still needs to recover 1956.50 for optimal confirmation that the upward momentum remains intact, and to allow for extending the rally to 1967.25 next.Trying to recover 1956.50 too much past the open would be much less credible, and failing to hold 1952.00 would start to suggest a deeper reaction down underway to 1944.00.
More details and other markets coverage are in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/mjzmrvc