Posts by Rod David
Mid-day Update… Backed-and-filled.
Post-open gains retraced.
The gap up to 2933.75 happens also to be this afternoon’s calculation for a bias-down signal.
It was tested during the noon hour down to 2931.25, but held to trigger “late no-bias.”
Momentum reversed down thanks to a correction triggered under 2938.75 and targeting the 2934.00 area. Its target was fulfilled by a 5-point spike down to 2932.00.
An inflection point at 2934.50 is now being tested to try reversing momentum back up. Its test is including a reaction back down to attack 2932.00.
The 2931.25 low can be retested by several ticks, and then down to 2928.00-2929.00. Any lower would start to suggest something more substantial than just a normal correction on the way back up to new highs.
Look ahead: Economic Calendar – for Tue Oct 2, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Two Fed speakers Tuesday keep alive the outside inputs on a day with an otherwise dead econ calendar. The afternoon’s speaker is the Fed chair, so price may become inhibited ahead of the event.
Redbook
8:55 AM ET
*Randal Quarles Speaks
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
*Jerome Powell Speaks
12:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2936.50 | 2941.50 |
| …would target | 2942.50 | 2947.50 |
| Bias-down: under | 2928.75 | 2933.75 |
| …would target | 2922.50 | 2927.50 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| 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… Reinforced.
Pre-open dip attracts post-open buyers.
The relentless overnight rally to 2937.75 faced the challenge of attracting post-open reinforcements. 
Often it does not, as overnight sponsorship starts selling and must be absorbed.
Today’s setup had a better chance of extending, because its news was a paradigm shift from recent perceptions. Helpful would have been a pre-open dip to negate the relentless label.
In fact, a 6-point pre-open dip to 2931.75 did inject pessimism, which is potentially bullish from a contrarian perspective. Already firming 2 points pre-open, extending higher recovered the 2937.75 overnight high through the open. That was also the renewed bias-up target, and exceeding it at 10:15 renewed the bias-up signal. Doubly-renewed, which is much less reliable. But it’s still a bias-up environment.
2942.00 was just touched. Its 2940.50 pullback limit is being tested, Violating it back under 2938.75 would trigger a correction targeting 2933.75-2934.50. Extending higher at any time would next target 2945.25.
The First Trade & Pre-open Tour Recording… Up, up, and await?
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…
Friday morning’s rally missed the opportunity to complete a retest of Wednesday’s 2907.50 low. The overnight attack on it to within 2 ticks also missed the opportunity. Enough of a recovery before the open allowed a little dip to test Thursday’s 2912.00 close. Its reaction held a test of the 2916.25 bias-down signal to put into play an offsetting test of the 2924.50 bias-up signal, which the morning’s high tested by 1 point. The afternoon ranged choppily flat-to-lower. Friday’s close again (barely) recovered 2919.00 for a second consecutive session. This keeps alive the That’s a different pattern, but the consequence should be to retest the prior Friday’s highs. And there would have been consequences to not recovering it, and/or to closing under 2914.00..
Overnight action’s new info…
Sunday night’s open spiked up 5-1/2 points on the afternoon’s news of a US-Canada trade agreement. Fluctuating around Friday’s 2925.50 high soon resolved up and probed Thursday’s 2932.00 high. The overnight high is currently 2937.75, which is the high cash session close from the prior Thursday, one session prior to the intraday high.
If, then… (notes to accompany the Tour recording)
Monday’s open is indicated to gap up above both last Friday and Thursday AND Wednesday’s 2925.50, 2932.00 and 2936.00 highs. Only 2925.50 was necessary for reversing the trend up by proxy. But if 2936.00 (or only 2932.00) is tested during the open, then ITS recovery will be the threshold, and not exceeding it through the open would reverse momentum back down — even if only for the morning, down to lower prior highs at 2928.50-2930.00. All of which is possible because relentless overnight trending often loses its sponsorship at the open. A pre-open dip would help to relieve that. Also, being triggered not only by news, but by paradigm-shifting news, the open may succeed at attracting reinforcements. And attracting reinforcements can extend to new highs at 2947.50, including last Friday’s 2945.25 opening gap up.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2932.25 would be likely also to exceed the 2930.75 bias-up target at 10:15 to renew the bias-up signal.