Posts by Rod David
The First Trade & Pre-open Tour Recording… Backing-off.
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…
Wednesday’s 2779.25 open immediately surged back to pierce the 2787.00 pre-open high by 3 ticks. And that was quickly retraced almost entirely back down to its 2773.50 pre-open low. So much for a correction. The balance of the session trended up relentlessly, and substantially, extending for a last-minute touch of 2815.00. Futures extended to 2817.50. It was the highest level in three weeks. Actually, the three-week old prior high that had resolved down into a two-week long decline. And unless rejected almost immediately Thursday, the next higher objective has been put into play in the 2850.00 area.
Overnight action’s new info…
Hovering up to the post-close highs through the Globex open was ratcheted down to what is this afternoon’s 2808.75 bias-down signal through Europe’s opens. And then price began falling. So far, only back down to 2802.00, which is still support for having been yesterday afternoon’s bias-up target. RSIs just diverged positively on its retest.
If, then… (notes to accompany the Tour recording)
Yesterday’s pre-open 2787.00 high represented the maximum for still qualifying as only a correction of the last downleg from its 3-week old high. Other candidates for ending the correction were met during the past week, and although influential to price action, none ended or reversed the rally. Now comes the first candidate for qualifying as a correction of the entire decline from October’s highs. Its range begins at 2811.00 and extends to 2818.75, most heavily weighted just under 2813.00. Almost all of which was probed yesterday by a single leg without any complexity. This area’s influence can end the correction, or simply launch a brief pullback, both being considered as the rally didn’t extend any higher overnight. Gapping back down under the afternoon’s 2793.50 bias environment low would be credible. Otherwise, almost any shallower or later weakness Thursday would more likely be only backing-and-filling before resuming the rally. Regardless, we’ll give a benefit of the doubt to any trending that extends throughout the opening 15 minutes of volatility. We’ll also stop giving a benefit of the doubt to any trending that hasn’t broken support or resistance this morning ahead of the afternoon’s FOMC policy statement.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2805.25 would be likely to trigger the 2808.75 bias-down signal at 10:15. Exiting the open above 2811.00 would be unlikely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2820.25 | 2820.00 |
| …would target | 2828.25 | 2828.00 |
| Bias-down: under | 2809.25 | 2808.75 |
| …would target | 2801.25 | 2800.75 |
| Signal status: BIAS-DOWN | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Reaction to Tuesday night’s election results fostered a sizeable overnight rally that greeted Wednesday’s open at 2779.25. Potential for a short-squeeze was fulfilled immediately by surging to pierce the 2787.00 pre-open high by 3 ticks. The squeeze was quickly retraced almost entirely back down to its 2773.50 pre-open low.
But no lower.
That was not the final opportunity to reverse the intraday trend down, but it was pretty much the last opportunity to marginalize sellers for the day. Which they were, anyway, as the rally extended relentlessly to 2815.00.
Interestingly, that’s essentially — a couple of points higher, actually — the initial bounce limit for extending the corrective leg that otherwise should have held 2787.00. Its next higher objective is the 2850.00 area.
Ending the corrective bounce without extending any higher would all but require rejecting Wednesday’s leg without any further delay. Gapping back down under the afternoon’s 2793.50 bias environment low would be credible. Otherwise, almost any shallower or later weakness Thursday would more likely be only backing-and-filling before resuming the rally.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Mid-day Update… Running away with it.
Open’s wide range resolves up.
Two tests of the 2787.00 area — three, including the pre-open high — resolved up to 2793.00. Consolidating back down to the 2787.00 area resolved up through its 2793.00 resistance, extending to 2801.25.
This afternoon’s 2795.75 bias-up signal has triggered, putting into play 2802.00, now being tested to within 3 ticks. More so, a correction of the entire October downleg is no in-play. Its minimum objective is 2814.50, and then potentially 2844.00 or even 2896.00.
There’s always a path down, however unlikely. Its minimum requirement is to close back under the 2787.00 area, and then to extend down sharply without delay. Almost any other shallower or less aggressive weakness is likely to maintain the rally.
Look ahead: Economic Calendar – for Thu Nov 8, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s claims may be high-profile, but it has no track record for influencing price action, and it’s the session’s only econ report… UNTIL the afternoon’s FOMC policy statement, the meeting having been delayed by one day due to the Federal elections.
Jobless Claims
8:30 AM ET
EIA Natural Gas Report
10:30 AM ET
FOMC Meeting Announcement
2:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET