Posts by Rod David
Mid-day Update… Try (fail), try (fail) again.
Sellers take another shot, and miss again.
This morning’s opportunity to trend down was not exploited, as I described in the post-open review. Being a 
Friday, with participation thinning out sooner than during other sessions, there’s usually only one chance for sponsorship.
A trending attempt isn’t required at all, and patient, strong-handed sponsorship wouldn’t start a fight it couldn’t win. So, a failed attempt reflects impatient, weak-handed sponsorship. Other sessions might see strong-handed sponsorship try later, but rarely on a Friday.
So, this morning’s sellers ultimately failed to trigger the 2916.25 bias-down signal. An offsetting test of its 2924.50 bias-up signal was fulfilled by 1 point at the morning’s high.
Now another opportunity for sellers to gain traction has presented itself. And sellers have again failed to exploit it. Already testing a sell signal at 2921.25, the FB headline triggered a 7-point plunge to 2915.50. The pattern’s bounce limit was violated, and this afternoon’s 2919.00 bias-down signal wasn’t triggered.
Opportunity missed. Knee-jerk reactions to news are the product of weak hands, anyway. And the headline’s origin is now retraced up to 2923.50. The no-bias environment could extend up to its 2926.00 bias-up signal, or dip to its 2913.50 bias-down signal. Either could break after the bias environment lapses — and trend up if the lapsing probes above the morning’s 2925.50 high, or down under 2919.00.
Meanwhile, closing under 2919.00 and 2914.00 would start to contradict the bottoming pattern we’ve been tracking. So, further downside today is less likely, or likely to be recovered.
Look ahead: Economic Calendar – for Mon Oct 1, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s calendar hasn’t been busy for awhile, and suddenly it’s going to be very busy. The pre-open Fed speaker might trigger a reaction, but the three post-open reports are a combination of high-profile and reliably influential to price action. They’re also the first last-looks at data that might either justify or question Wednesday’s FOMC rate hike.
Raphael Bostic Speaks
8:30 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Eric Rosengren Speaks
12:15 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2921.25 | 2926.00 |
| …would target | 2926.75 | 2931.50 |
| Bias-down: under | 2914.00 | 2919.00 |
| …would target | 2908.50 | 2913.50 |
| Signal status: 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… A for effort.
Overnight drop fails to attract reinforcements.
The overnight drop ultimately extended down to 2908.00. Despite being within 2 ticks of Wednesday’s low, that doesn’t qualify as neutralizing its retest.
But you wouldn’t know it from subsequent price action, which attacked 2914.00 pre-open, and 2917.00 post-open.
The proximity to retesting prior lows, the attempt to retest them, the gap down — all under this morning’s 2916.25 bias-down signal. If sellers can’t exploit these conditions, then they probably can’t, not today. And they didn’t
After invoking the grace period, a “late no-bias” triggered. And it triggered at a post-10:15 high to help confirm. Extending even higher since 10:30 is further confirmation that a test of the 2924.50 bias-up signal is in-play.
Currently, the bounce has reached 2922.25. We won’t consider an aggressive sell signal until the bias objective is met. And that’s not to say its test will resolve in one direction, or the other. Being a Friday, the afternoon will be vulnerable to only ranging sideways.
The First Trade & Pre-open Tour Recording… All gone.
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 durable bottom all but requires probing under Wednesday afternoon’s 2907.50 plunge lows. That didn’t prevent Thursday’s open from gapping up to and through what had been “lower prior highs” at 2914.00, and extending above the critical 2919.00. Extending higher didn’t invalidate the downside requirement, either. And the extension was substantial, persisting through the bias environment, into and out of the noon hour up to 2932.00. Dropping 15 points from there down to 2917.00 expended a lot of selling pressure in a short time frame, and avoided closing under 2919.00. But Thursday afternoon’s sellers gained traction — exiting the bias environment under the noon hour’s low and entering the final hour even lower — keeping alive Thursday afternoon’s selling pressure into Friday morning.
Overnight action’s new info…
Thursday’s late bounce up to 2922.00 was immediately retested at the Globex open. It extended to within 1 tick of this morning’s 2924.50 bias-up signal. Things have changed greatly since then. An aggressive drop through Europe’s opens probed under yesterday’s afternoon’s low to 2915.00. Its reaction up has fallen to lower lows under yesterday morning’s low at 2911.75.
If, then… (notes to accompany the Tour recording)
Closing back above 2914.00 and (barely) 2919.00 creates a position of strength to help recover from lower lows. Which will be needed, because the traction gained by Thursday afternoon’s drop makes Friday morning likely to trend lower. Overnight lows are only now testing yesterday morning’s low, so the Isolation setup is probably moot. Meanwhile, probing under Wednesday’s 2907.50 low has room to 2900.75 while still being likely to recover 2914.00 and 2919.00 through the close. Closing much lower than that would threaten to extend deeper into next week.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2915.50 would be likely to trigger the 2916.25 bias-down signal at 10:15. Exiting the open above 2919.00 would be unlikely to trigger bias-down.