Posts by Rod David
Mid-day Update… Crowding out durability.
Artificial surge steals spotlight from organic recovery.
The open’s potentially bearish setup, which failed its attempt to fully form, didn’t prevent dipping temporarily. The bearish setup would have trended down all morning, but the 2884.50 bias-down signal was able to fulfill its 2879.00 bias-down target (to within 2-3 ticks) and then recover.
In fact, the 2884.50 bias-down signal was recovered as the bias environment was coming within view of lapsing. Actually, 2-3 minutes early, but that’s not a deal killer. Its recovery surged to touch the 2895.25 overnight high.
But the artificial catalyst made the surge likely to be retraced to its origin. Which it was, by noon, back down to 2882.75. Now the afternoon’s 2888.75 bias-up signal has avoided triggering, and also avoided holding. This is a noN-bias environment — the bias-up target is not in-play, and neither bias signal is required to hold if tested.
Back above 2888.00 would start to signal another rally effort underway. In the absence of headlines, the organic effort should produce fresh highs. Meanwhile, back under 2885.00 (being tested now) would start to signal a deeper dip uderway.
Look ahead: Economic Calendar – for Thu Sep 13, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s pre-open CPI is both high-profile, and reliable for influencing price action. The noon hour’s Fed speaker may also influence price action, although the 30-year auction can be more influential to at least inhibit volatility until its results.
*Bank of England policy statement
7:00 AM ET
*CPI
8:30 AM ET
Jobless Claims
8:30 AM ET
EIA Natural Gas Report
10:30 AM ET
*Raphael Bostic Speaks
12:30 PM ET
*30-Yr Bond Auction
1:00 PM ET
Treasury Budget
2:00 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 | 2888.00 | 2888.75 |
| …would target | 2894.75 | 2895.50 |
| Bias-down: under | 2878.25 | 2879.00 |
| …would target | 2871.75 | 2872.50 |
| Signal status: noN-BIAS, TESTED BIAS-UP 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… Excessively restrained optimism?
Bearish setup avoided, but bearish behavior ensues.
Overnight probed above yesterday’s 2893.00 high. So, exiting the open at 9:45 under the earlier 2888.00 overnight low would have formed a 
bearish setup. Price would have been expected to trend down through this morning, if not also through tomorrow morning.
2888.00 wasn’t broken through 9:45. Not for lack of trying. So, sellers tried to form the setup, and failed. The consequence should be as bullish as it would have been bearish.
It hasn’t been bullish, not at all. And it might not be. Instead, the 2884.50 bias-down signal triggered, albeit late. Already meeting its 2879.00 bias-down target to within 3 ticks means it won’t become “unfinished business” if left outstanding.
This is still a bias-down environment. Back above 2884.50 would be bias-down rallying, and require being retraced. Perhaps NDX underperformance needs to be absorbed and stabilized, first. Recovering 2884.50 after the bias window starts lapsing would be free to rally — and could still be as bullish as the earlier setup would have been bearish.
The First Trade & Pre-open Tour Recording… A pulse.
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 night’s retest of 2884.50 resistance had held once again, this time with help from China tariff headlines that triggered a slide to 2867.25 through Tuesday’s open. That test of both bias-down parameters held, and offsetting tests of both bias-up parameters were fulfilled as the bias window ended and as the noon hour began. Things went sideways from there, ranging around the morning’s 2890.75 bias-up target and the afternoon’s 2891.25 bias-up signal, down to 2887.50. No new unfinished business was left outstanding, and no traction was gained.
Overnight action’s new info…
Volatility wasn’t much different overnight than it was Tuesday afternoon, but it was more productive. Initially flat-to-lower, a dip to 2886.25 was recovered back up to and through Tuesday’s highs to 2895.25. Coming within 3 ticks of “unfinished business” at 2895.50 has neutralized it, and price has since dipped back down to 2890.75.
If, then… (notes to accompany the Tour recording)
Without gaining traction Tuesday afternoon, immediately resuming the morning’s rally Wednesday would require gapping up above 2893.00. Currently, only probing temporarily above Tuesday’s high isn’t indicating a gap up… or a gap down. And having probed overnight above yesterday’s intraday high, exiting the open under the 2888.00 earlier overnight lows would reverse trending down for at least this morning — if not also through tomorrow morning. Overnight highs neutralized the 2895.50 objective, so maintaining its recovery should point higher. Reversing down could test “lower prior highs” at 2882.00-2883.00 simply as noise.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2895.50 would be likely to trigger the 2894.00 bias-up signal at 10:15. Exiting the open under 2890.75 would be unlikely to trigger bias-up.