Posts by Rod David
Pause that refreshes can also kill.
Big intraday rally is still only tentative.
Failing to hold the 2050.25 bias-down target through 10:15 essentially had put into play a test of 2040.25. It was probed down to 2035.00. But that was between the morning”s bias environment exit and the noon hour”s entry, both of which were above 2040.25.
So, 2040.25 qualified for having been met, and held. And it was produced by a Symmetrical Triangle, a pattern that tends initially to break falsely in one direction before reversing more substantially in the opposite direction. Was that the false break?
It seems so. The reaction up never pulled back to fulfill my retracement criteria before exceeding my 2044.50 buy signal. That has extended to attack 2061.00. But this afternoon”s 2059.25 bias-up target was still being overlapped at 1:20 to avoid renewing the bias-up signal.
So, this afternoon”s bias environment has ranged narrowly sideways around the 2059.25 bias-up target. Being a bias-up environment, the rally may extend any time it pleases. Being the bias environment will soon start lapsing, it had better extend higher soon.
My concern is that this upleg is a “noon hour counter-trend,” which bisects the afternoon”s resumption of the morning”s trend. I haven”t seen one in quite awhile, but it would target fresh session lows. And several elements of the rally are keeping it vulnerable to ending.
Probing fresh highs above 2063.00 — and extending higher, not just retesting the high”s overbought RSIs — would help to alleviate my concern about resuming the decline today. Meanwhile, back under 2053.25 would start signaling at least a dip underway, if not new lows.
Look ahead: Economic Calendar – for Wed Jul 8 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Wednesday afternoon”s FOMC Minutes should be very influential as the timing of a mythical rate hike takes on greater importance.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
*John Williams Speaks
2:00 PM ET
**FOMC Minutes
2:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2062.25 | 2053.75 |
| …would target | 2067.50 | 2059.25 |
| Bias-down: under | 2051.00 | 2042.75 |
| …would target | 2045.50 | 2037.00 |
| 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… Tough crowd.
Pre-open slide becomes post-open plunge.
We knew that yesterday afternoon”s buyers had failed to gain traction. Bouncing and rallying overnight would likely be retraced either to unchanged around 2062.00, or to 2053.25 within the structure at yesterday”s low.
Small thinking. The opening 15 minutes tested 2055.00. A shallow consolidation there had an opportunity to reverse up, but simultaneously oversold 1-minute and 3-minute RSIs inhibited a recovery while the low required a retest.
Then 2053.25 was tested. By a leg that extended to 2046.25. Renewing the bias-down signal under its 2050.50 target essentially put into play 2040.25.
Still small thinking. Selling resumed and accelerated again into 2037.25. RSIs were again simultaneously oversold. A bounce from there just touched 2046.00. Retesting the low could form a durable bottom if already in recovery mode at 11:30, or if the retest were delayed until then.
Otherwise, exiting the bias environment under 2040.25. would start to suggest a much more substantial decline underway.
The reaction down from 2078
The reaction down from 2078 extended to 2063. Futures are unchanged, but that”s still positive territory compared to yesterday”s earlier, lower cash session close. Patterns that developed during the drop suggest that holding 2062-2063 through the opening 15 minutes can be important to resuming the rally quickly. Back above 2068.50 would target a retest of overnight highs. But not holding 2062-2063 could at least attack yesterday afternoon”s lows around 2053.25. Any lower would start targeting a probe under Sunday night”s lows. Here”s details in the pre-market Tour:
https://roddavid10.mitel-nhwc.com/join/rkbscby