Posts by Rod David
Mid-day Update… A detour to the detour’s detour?
Morning slide is retraced entirely.
The Globex-flip setup produced its minimum requirement, to produce bearish behavior through the morning. Exiting the open under the 2813.25 earlier Globex low collapsed 30 points down to 2783.25. It was already retraced 61.8% when the bias environment began lapsing at 11:30.
That should have held if the bearish influence were going to persist through tomorrow morning, too. Instead, extending higher through the noon hour has returned to the lower-end of the 2819.50-2823.00 bounce objective.
Just piercing the 2819.50-2823.00 lower-end would be likely to test its upper-end. And that would likely probe the 2814.00 overnight highs. All of which would make the next higher objective at 2838.00 likely. Perhaps the FOMC Minutes reaction will trigger that — anxiousness ahead of it is not.
So, avoiding fresh highs this afternoon would keep alive another downleg that resumes retracing and reversing yesterday’s rally. Even if originating from higher, that’s the likely resolution to having broken out of the multi-session Ascending Triangle.
Look ahead: Economic Calendar – for Thu Oct 18, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s Fed survey is the only Fed survey with a reliable track record for influencing price action. And any noticeable price action is likely to be duplicated in reaction to the high-profile post-open LEI. In between is a high-profile Fed speaker who might add to the price influence.
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
*James Bullard Speaks
9:00 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
30-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2810.25 | 2811.00 |
| …would target | 2816.75 | 2818.50 |
| Bias-down: under | 2797.50 | 2799.50 |
| …would target | 2789.50 | 2791.50 |
| Signal status: BIAS-UP, BIAS-UP 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… Globex flipped.
Opening setup plays out quickly.
Probing the prior session’s high overnight, but exiting the open under the earlier Globex low, forms a Globex-flip setup. This morning’s open was greeted by a bounce from 2804.00 attacking the 2813.25 earlier Globex low to within 1 tick. Trending down 19 points since then has tested 2792.50.
Along the way, the 2803.00 bias-down signal triggered cleanly. Its 2795.00 bias-down target was being tested at 10:15 to avoid renewing the bias-down signal, but this is still a bias-down environment.
The Globex-flip’s influence should last through the morning. Otherwise, its influence should last through tomorrow morning. So, trending down this morning without recovering this afternoon would very likely trend down tomorrow morning, too.
Absorbing and reversing the bearish influence is possible whenever it has developed so quickly. Back above 2800.75 would target a corrective bounce up to 2807.00. Exiting the bias environment much higher could resume the bounce for its 2838.00 potential.
The First Trade & Pre-open Tour Recording… The shape of things to come.
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…
A relentless 28-point overnight rally greeted Tuesday’s open by gapping up to 2773.00. The uptrending support that Monday’s late-afternoon slide had broken was immediately recovered. The Ascending Triangle pattern we were tracking remained intact. The opportunity to reject it was ignored, and the balance of the session rallied another 36 points to 2816.00. Even a very last-minute pullback to 2808.00 was recovered through the futures close to 2919.00. This is the lower-end of 2919.00-2923.00 which is the next higher resistance from a Running Correction that had formed during last Wednesday afternoon’s decline, one of the Triangle’s likelier objectives.
Overnight action’s new info…
Tuesday’s last-minute recovery up to 2819.00 was consolidated through midnight by a narrowing range, forming a shallow Ascending Triangle. Breaking higher into Europe’s opens attacked 2924.00. And as quickly as possible, it was retested while RSIs diverged negatively, reversing the trend back down to 2807.00. By the way, being a corrective bounce, that’s not a “new Globex trend extreme” which would otherwise require an intraday retest.
If, then… (notes to accompany the Tour recording)
2919.00-2923.00 resistance has now been thoroughly tested, and influential. Its test and reaction overnight is less optimal than intraday, but still credible if Tuesday afternoon’s 2808.00 bias environment highs fail to hold as support. Otherwise, resuming the rally this morning would next target 2838.00 “higher prior lows” from last Wednesday morning’s consolidation. There’s also a powerful setup trying to form, having probed overnight above yesterday’s high, which would be very bearish if exiting the open under the 2813.25 earlier overnight low.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2808.00 would be unlikely to trigger the 2803.00 bias-down signal at 10:15. Exiting the open under 2811.00 would be unlikely to trigger the 2819.50 bias-up signal.