Posts by Rod David
The case for crashing… or at least sliding relentlessly.
It”s also a case for simply weakening.
This morning”s open gapped up to and through yesterday afternoon”s 2105.50 high. After having trended down into yesterday”s close, this rejection begins forming a “session-long rally” setup. The setup is completed by maintaining the gap up.
Today”s gap up wasn”t maintained. This is not a session-long rally. But there is a consequence to forming all but the final element to a setup. Often, however bullish or bearish the completed setup might be, the incomplete setup is the opposite.
Has today”s setup inverted to a session-long decline? Only one of today”s three timing windows so far has failed to probe a prior low. Every remaining timing window must now probe a lower low to track the session-long decline template.
Facilitating that is several attractions below that don”t point sharply lower, so much as they simply point lower for awhile:
– Required retest of oversold RSIs at this morning”s 2098.25 low.
– This afternoon”s 2101.50 bias-down signal would target 2096.00.
– Yesterday morning”s signal for trending down through Friday morning.
Not triggering this afternoon”s 2101.50 bias-down signal — being tested now — wouldn”t necessarily be bullish. That no-bias could simply delay extending down further until late afternoon. Nothing requires down steeply, but this wouldn”t be a bullish environment to try absorbing more negative headlines.
Look ahead: Economic Calendar – for Fri Jun 26 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Friday”s pre-open Consumer Sentiment number has a good track record of getting a reaction from price action. Being hawkish, the post-open Fed speaker probably won”t surprise the market, but she”s highlighted anyway.
*Consumer Sentiment
10:00 AM ET
*Esther George Speaks – hawk
12:45 PM ET
Afternoon bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2116.75 | 2108.50 |
| …would target | 2121.75 | 2113.50 |
| Bias-down: under | 2109.75 | 2101.50 |
| …would target | 2104.25 | 2096.00 |
| Signal status: NOn-BIAS, TESTED BIAS-DOWN 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… Doubt.
And it”s a big doubt, whether buyers can be productive this morning.
The open”s test of the 2107.50 preliminary signal reacted down under 2104.25 to trigger its sell signal. The 2097.50 bias-down signal was attacked to within 3 ticks. Both 1-minute and 3-minute RSIs became oversold.
Not exceeding 2105.75 through 10:30 would trigger late no-bias, putting into play a test of the 2097.50 bias-down signal. This would satisfy the required eventual retest of oversold RSIs at the low.
Reacting up again touched the 2105.75 bias-up signal within 3 minutes of 10:15 to invoke the grace period. Recovering it through 10:30 would trigger late bias-up, putting into play its 2110.50 bias-up target.
Triggering late bias-up could be productive, but probably not durable. Just trending above the bias-up signal this morning in a no-bias environment wouldn”t be much different — the opportunity to reject yesterday”s bearish setup has passed, and any bounces are likely only refueling sellers for a deeper drop through tomorrow morning.
The overnight surge that attacked
The overnight surge that attacked 2113.50 had fallen to test 2105.75 as support before trying to rally again. That attempt had no bullish reason to delay extending higher, but it did delay, and it fell. Now the open is being greeted by a bounce off of 2104. The promise of gapping up above Mon-Tue lows, is now struggling to at least gap up above yesterday afternoon”s highs, which would form a “session-long rally” setup. Not maintaining a gap up above yesterday afternoon”s high and 2105.75 resistance would be as bearish as it could have been bullish.
Here”s more detail in the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/rkbswwf