Posts by Rod David
The First Trade… The vulnerability of a promise.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Monday night”s slide exceeded its 2091.25 pullback limit considerably. Tuesday”s volatile open ranged choppily under that limit, and probed above it. Each timing window probed higher and higher, although each leg overlapped the morning”s test of 2096.00-2097.00. Buyers didn”t gain traction, exiting the bias environment above the noon hour”s high. But neither of the next two timing windows extended higher — the final hour”s entry and 3:10-3:20 remained within the noon hour and bias environment ranges.
Overnight action”s new info…
Lacking traction didn”t prevent extending higher, first to test 2101.50 last night, and more recently to briefly touch 2105.75. That has reacted down to test 2101.50 as support.
If, then…
Overnight highs are probing back within Monday afternoon”s range, chipping away at its resistance and clearing the way for any post-open effort. If there is one. Gapping up is necessary to resume a rally that didn”t gain traction. So, this action is promising, keeping alive potential to new highs within 24-48 hours. Meanwhile, no prior traction also makes gapping up vulnerable. Not extending it post-open can produce a rubber band effect whose reversal down retests yesterday afternoon”s lows, which are 15-16 points lower.
First Trade…
Exiting the open at 9:45 above 2104.25 would be likely also to trigger the 2101.50 bias-up signal at 10:15. Exiting the open under 2098.25 would be unlikely to trigger bias-up. Exiting the open under 2096.00 would be likely at least to attack Friday”s 2090.00 noon hour lows, and perhaps also this morning”s 2088.00 bias-down signal.
Look ahead: Economic Calendar – for Wed May 13 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Wednesday”s Retail Sales report has a history of influencing price action, but only when it is surprising — which isn”t that rare anymore.
MBA Mortgage Applications
7:00 AM ET
*Retail Sales
8:30 AM ET
Import and Export Prices
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Business Inventories
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
Yesterday”s recovery tried gaining traction
Yesterday”s recovery tried gaining traction in the afternoon, but only one timing window showed enough effort. But the next two didn”t reject it. Nevertheless, the effort has extended higher overnight, first up to 2101.50, and now to briefly touch 2105.75. Gapping up is necessary to resume a rally that didn”t gain traction, so this action is promising, keeping alive potential to new highs within 24-48 hours. It”s also vulnerable — not maintaining a gap up can produce a rubber band effect that retests yesterday afternoon”s lows, 15-16 points lower. See you at the 8:55 ET pre-market Market Tour in the chaRTroom, which you can access anytime here:
Win – XP friendly: http://anymeeting.com/869-139-358
non-xp ilinc-Mitel: https://roddavid10.mitel-nhwc.com/join/bfyyts
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2106.50 | 2101.50 |
| …would target | 2112.25 | 2107.50 |
| Bias-down: under | 2092.75 | 2088.00 |
| …would target | 2088.00 | 2083.00 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Tuesday”s drop could have been
Tuesday”s drop could have been a lot worse.
There was additional pullback potential down to 2091.25 under Monday”s 2099.50 low. But there was no requirement to test it. Having probed under it overnight, opening above it could have launched a durable intraday rally. But it didn”t hold, it wasn”t recovered, and the market left negative territory only intermittently.
A recovering must exploit that positioning by at least exiting Wednesday”s bias environment in rally mode, above Tuesday afternoon”s ~2101 high. A morning dip could still be recovered. Indeed, a morning dip would still likely be recovered. But not recovering a morning dip would target Tuesday”s opening range, and perhaps lower.
Avoiding a bigger decline required holding the pre-open 2079.25 low. It was. Reversing momentum up required opening above 2091.25. It was not. Closing above 2094.25 at least kept sellers from regaining traction, but closing above 2096 would have been more convincing.If it sounds like the market could trend either way here, that”s because it can. And the setup into Wednesday morning allows for trending sharply in both directions (not at the same time) and still return to unchanged.
Here”s more in the pre-market Tour:
https://roddavid10.mitel-nhwc.com/join/mjvhssh
And here”s the chaRTroom links:
Win – XP friendly: http://anymeeting.com/192-252-933
non-xp ilinc-Mitel: https://roddavid10.mitel-nhwc.com/join/bfyyts