Posts by Rod David
Mid-day Update… Prove it.
Positive territory recovered, and so far, defended.
Holding a test of this morning’s 2857.75 bias-down signal through the open had put into play an offsetting test of the 2866.25 bias-up signal. And probably also 2867.25, potentially 2869.50. The bias-up signal was tested before the bias window began lapsing. Higher highs before noon probed 2 points higher.
Its reaction has dipped back to 2863.00-2863.50. Yesterday’s open and close, this morning’s opening high, and generally support. None of which means it will prevent another drop into negative territory.
My premise during the Market Tour was for this morning to bounce to 2867.25, and then possible launch a second downleg. There’s still no “unfinished business” above. So, not rallying when this afternoon’s bias window begins lapsing, would probably be because another downleg has already begun.
Look ahead: Economic Calendar – for Thu Aug 23, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The Jackson Hole convention of Central Bankers begins. Sporadic headlines are likely to have an impact — however brief. Econ reports are meanwhile constant through the open, albeit not very high-profile or reliable for influencing price action.
Jobless Claims
8:30 AM ET
FHFA House Price Index
9:00 AM ET
*PMI Composite FLASH
9:45 AM ET
New Home Sales
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM 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 | 2869.00 | 2869.50 |
| …would target | 2874.75 | 2875.25 |
| Bias-down: under | 2859.50 | 2860.25 |
| …would target | 2853.50 | 2854.25 |
| Signal status: NO-BIAS | . | |
| 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… Still in the brink.
Open’s test of unchanged pauses the recovery.
The overnight drop’s recovery had rallied 15 points up to 2861.00, and still had time for an 8-point pullback. And that was already recovering to greet the open at 2859.00, on the way up to unchanged at 2863.50.
Unchanged, and also a 61.8% retracement back up to yesterday’s high. Natural resistance, and it resisted. Another pullback tested the 2857.75 bias-down signal. Twice.
But as expected, a bigger bounce is likely. Holding the bias-down signal’s test has put into play an offsetting test of the 2866.25 bias-up signal (now being attacked to within 3 ticks), probably up to 2867.00, potentially up to 2869.50. Back under 2860.00 would start to signal the bounce was done.
The First Trade & Pre-open Tour Recording… Struggling back.
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…
Tuesday’s gap up to 2863.50, which was the two-week old prior high. Probing higher through the noon hour neutralized unfinished business at 2866.25 and 2873.00. No-bias triggered as price drifted lower through the afternoon bias environment. The session’s close was back at 2863.50, representing indecision, and also touching the two-week old prior high.
Overnight action’s new info…
Yesterday’s late news has had a big effect. Price had already turned down organically Tuesday afternoon, and headlines steepened the dive through the 2861.00 futures close. Plunging to 2852.00 and extending to 2847.00 into and out of the Globex open was retraced to 2857.50 by midnight. A 6-point reaction down was recovered into and out of Europe’s opens, but only started breaking higher 90 minutes ago and is now filling the gap back to yesterday’s 2861.50 futures close — 15 points off the low.
If, then… (notes to accompany the Tour recording)
A lot of ground was covered by yesterday afternoon’s decline, and another 161.8% into early evening. So, its 61.8% retracement would also fill the gap back to yesterday’s 2863.50 cash session close. That’s also yesterday’s open. All being resistance, which evokes an important question: As late as yesterday’s news was, and as slowly as the market appreciated it before the close, has the intraday crowd yet fully reacted to it? To the degree it hasn’t, opening back in negative territory would be that much more inviting to post-open selling, and that much more difficult to recover. Probing into positive territory would still have a lot of resistance above to prevent fully retracing yesterday’s highs.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2855.50 would be likely to trigger the 2857.75 bias-down signal at 10:15. Exiting the open above 2859.00 would less likely to trigger bias-down, and above 2865.00 at 10:15 would be unlikely to trigger bias-down.