Posts by Rod David
Waited too long to attract longs?
Still vulnerable to probing new lows. And then some.
My last post was confusing on this point: Probing new lows this morning would have fulfilled two contextual signals, from Wednesday morning”s break and from Thursday”s session-long decline. Waiting until this afternoon to probe new lows would be vulnerable to a melt-down..
New lows this morning had more time to attract counter-trend sponsorship that could justify the risk ahead of weekend illiquidity. That time is shrinking exponentially, and so is the availability of counter-trend sponsorship.
New lows are printing now at 2088.00, as the noon hour ends.
Friday morning biases tends to persist through the noon hour. Afternoon refers to the bias environment. That leaves 20-30 minutes to probe new lows and either bottom during 1:20-1:30, or to be recovering already back above a relevant level.
This afternoon”s 2092.75 bias-down signal is a relevant level. Recovering it in time would help to trap shorts. Already tested the 2087.25 bias-down target to within 3 ticks is a start.
Otherwise, it starts getting difficult to attract buyers, and it starts getting much easier to attract sellers.
Look ahead: Economic Calendar – for Mon Jun 29 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Monday”s post-open housing sector report is the first in almost a week, but it”s not likely to get a reaction without being surprising. Like all other Fed surveys except Philadelphia, the Dallas survey has no track record of influencing price action.
*Pending Home Sales Index
10:00 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Farm Prices
3:00 PM ET
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2107.75 | 2099.25 |
| …would target | 2113.75 | 2105.50 |
| Bias-down: under | 2101.00 | 2092.75 |
| …would target | 2095.75 | 2087.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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… Pick a mixed signal, any mixed signal.
Volatile open leads to multiple signals. They”re all correct.
The open”s dip pierced yesterday”s 2092.00 low by 3 ticks. That does NOT qualify as probing fresh lows. Probing fresh lows this morning was indicated by yesterday”s session-long decline, and by Wednesday morning”s break.
The open touch of this morning”s 2091.25 bias-down signal does not put into play an offsetting test of the 2096.75 bias-up signal. That”s because the 2098.00 open had already tested the bias-up signal.
Bouncing from the open”s low probed a fresh high at 2100.75. It reacted down just enough to touch the 2096.75 bias-up signal, just in time to invoke the grace period. And despite extending down to 2094.50, bouncing through 10:30 recovered 2096.75 to trigger “late bias-up.” On that point…
The late bias-up doesn”t prevent this morning from probing under yesterday”s lows.
We see several “late” bias signals each week, which invoked the grace period at 10:15. We don”t see many instances of testing both bias signals by 10::15… each month. Testing three bias signals by 10:15 — one”s test interrupting two tests of the other — is too rare to draw any reliable inference from its limited history.
Some signals are more reliable than others, but none more so than mixed signals. Contrarians anticipate the market doing its best to disappoint the most people at any given time. This is true, when many people are coagulating around a similar opinion.
But there is no contrarian position to mixed signals. So, rather than disappoint, the market tends to satisfy as many of the signals as possible. This is that instance.
So, regardless of the late bias-up, we”re still expecting to probe yesterday”s lows this morning. And we”re expecting the late bias-up”s extra room to help absorb that selling pressure to avoid melting down into the weekend. Not probing fresh lows this morning would be vulnerable to melting down this morning.
Preliminary levels at 9:45 for
Preliminary levels at 9:45 for this morning”s bias-up signal are 2098.50 and 2099.25. Both are being tested pre-open, and both are being influential. But both tests are irrelevant until one or both is repeated post-open. Then their resolutions can make the 2096.75 bias-up signal likelier or not to trigger at 10:15.
Here”s more detail in the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/cxsppkb