Posts by Rod David
Mid-day Update… Early to bed, early to rise.
Downside target met already, again.
Holding a test of the morning’s 2738.50 bias-up signal, despite having traded to 2744.00, all rejected as price collapsed back down to overnight lows. 
Then all recovered, and more.
This morning’s low reversed up sharply from within 2 ticks and 2 minutes of fulfilling its 2720.00 objective. The open’s 2744.00 high was retraced within a half-hour. Fresh highs attacking 2756.00 within the next 20 minutes.
Is a similar setup developing? This afternoon’s low touched its 2727.75 bias-down target. Bias-down did trigger cleanly, but a reversal is already being attempted up to 2740.50. Anything above the 2735.50 bias-down signal is “no-bias trending” that requires being retraced.
Extending higher could find sellers are done, and with no attractions outstanding below. Otherwise, back under 2731.50 would start to signal the bounce had failed, and once again open the door to another downleg.
Look ahead: Economic Calendar – for Wed Nov 14, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Similar to Tuesday which had no post-open econ reports and one Fed speaker, Wednesday has one post-open report which has no track record for influencing price action. The session’s one Fed speaker is also pre-open, and has a mixed record of influencing price action.
MBA Mortgage Applications
7:00 AM ET
CPI
8:30 AM ET
*Randal Quarles Speaks
9:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2750.75 | 2751.75 |
| …would target | 2757.00 | 2758.00 |
| Bias-down: under | 2734.75 | 2735.50 |
| …would target | 2727.00 | 2727.75 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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… That was then, this is now.
Overnight bounce fails, fulfilling sellers.
Several potential recovery patterns were trying to form ahead of this morning’s open. Ultimately, either they didn’t form, or didn’t trigger.
The 2750.25 overnight high stopped 2 points short of piercing yesterday afternoon’s high, whose opening recovery would have formed a “session-long rally” setup. 
The Head & Shoulders broke lower, instead of higher. And opening back within yesterday’s range had isolated the overnight probe under yesterday’s range, but it has been retested already.
Also, the 2738.50 bias-up signal held its test, putting into play an offsetting test of the 2720.00 bias-down signal.
All of which is potentially bullish: Never actually probing yesterday afternoon’s high means the session-long rally never formed, so it was never rejected. The Head & Shoulders target was met. And the Isolation setup may be forming elsewhere this morning.
The bias environment was entered above yesterday’s low at 2737.50-2740.00. Exiting the bias environment back above its entry would isolate its probe under yesterday’s low. Similar to the overnight Isolation setup, but not optimal. So, its reward would still be a retest of last Wednesday’s highs, but the recovery must produce fresh highs today.
Already, the 2738.50 bias-up signal is being retested. So, the opportunity to bottom is being exploited, but there’s also a narrow window. There’s a big reward to bottoming, but there’s also a big consequence to not bottoming — 2685.00.
The First Trade & Pre-open Tour Recording… Delayed reversal?
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Monday was the third consecutive downtrending session spent exclusively in negative territory. Sellers were refueled by an overnight rally to the morning’s 2795.50 bias-up target. But the open was already back down at its 2775.00 bias-down signal. The first hour collapsed to 2733.00, which supported a range back up to 2752.00 through the afternoon bias environment. The proxy window finally broke lower to 2722.00, retracing all of last of last week’s rally — before Wednesday’s election results surge, back down to the prior Friday’s close.
Overnight action’s new info…
A brief bounce resolved down to a fresh low at 2719.00, testing what is this morning’s 2720.00 bias-down signal. Not much lower, and also not extended, so easily retraced back up to 2745.00 by midnight. Its reaction down to 2733.00 was just retested, following an interim surge up to 2750.00. That is potentially the head of a Head & Shoulders pattern, with its neckline being 2733.00. The 2745.00 shoulder has been recovered, and is being probed almost too much to maintain the Head & Shoulders form.
If, then… (notes to accompany the Tour recording)
Overnight action contains multiple reversal patterns, waiting to be triggered, all of which can be ignored. Head & Shoulders: Dipping back under the Head & Shoulders 2733.00 neckline would trigger the reversal pattern, targeting a retest of at least yesterday’s lows, and potentially resuming the decline. The pattern doesn’t always reverse price action, and extending higher would entrench the overnight recovery. Leapfrogging over interim resistance at 2739.00-2743.00 at Tuesday’s open would be the quickest signal of rejecting Monday’s decline. Isolation: An Isolation setup would form by avoiding a dip back down to yesterday’s low since it was probed overnight. Session-long Rally: Maintaining and extending a gap up to and or through Monday afternoon’s 2752.00 high would form a session-long rally setup. Otherwise, resuming the decline could reach 2786.00 before its next opportunity to try bottoming again.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2743.00 would be likely to trigger the 2738.50 at 10:15. Exiting the open under 2733.00 would be unlikely to trigger bias-up.