Posts by Rod David
Mid-day Update… Sooo close.
Pessimism is alive and well.
R
etesting this morning’s 2839.00 GDP reaction didn’t hold. Bias-down didn’t trigger, but its 2829.50 bias-down target was attacked to within 2-3 ticks at the bias environment low. The noon hour steepened the drop and extended it much, much more sharply.
Breaking under this afternoon’s 2822.00 bias-down target renewed the bias-down signal, next targeting “unfinished business below” at 2813.75. It was tested down to 2808.75.
Now a bounce is testing 2817.00. But the trend hasn’t reversed up. Exiting the bias environment back above 2818.00 would help to signal a short-squeeze underway, with potential to 2829.50. Otherwise, back under 2811.00 would at least probe fresh lows, if not resume the decline next targeting 2801.50.
Look ahead: Economic Calendar – for Mon Jul 30, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s two reports are high-profile, but not reliably influential to price action. That said, the Housing sector data will the first look in several days at what was hinting at a slowdown.
Pending Home Sales Index
10:00 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Farm Prices
3:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2837.00 | 2837.25 |
| …would target | 2843.75 | 2844.00 |
| Bias-down: under | 2827.50 | 2828.00 |
| …would target | 2821.50 | 2822.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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… Upside ends prematurely.
REMINDER: MARKET WRAP IS ONE HOUR EARLY TODAY.
Trending up relentlessly overnight had tested yesterday’s 2846.50 high. There was no assurance that reinforcements would carry the trend higher post-open, but I would be reluctant to short before neutralizing the unfinished business above at 2848.75.
After the GDP reaction’s dip to 2839.00, no new sponsorship made its retest likely. Holding its retest would have potential back up to 2848.75.
Neither path higher formed. The dip to 2839.00 developed as was expected, but only to form a Descending Triangle that broke lower. Testing the 2836.50 bias-down signal at 10:15 and 10:30 has triggered noN-bias. The 2829.50 bias-down target is still an attraction, but doesn’t require being tested or held. Now it’s being attacked to within 2 points.
Recovering 2837.25 through a relevant window like the bias environment exit would start to signal this morning’s drop had ended. The vacuum back up to yesterday’s and overnight highs wouldn’t need any new sponsorship to rally — diminished selling would be enough.
The First Trade & Pre-open Tour Recording… Back to square-two.
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…
Wednesday’s late 18-point surge up to 2849.50 was retraced almost entirely overnight down to 2833.25. Thursday’s opening surge was also retraced , as were each of Thursday morning’s higher highs. Ultimately, it was an inside day, gaining no traction either way. But “unfinished business above” was left outstanding at the morning’s 2848.75 bias objective. And attempts to reverse down repeatedly failed. Despite the entire session developing in negative territory, the burden of proof was left on sellers The 4-point differential between cash session and futures 2838.25-2842.50 closes was similar to Wednesday.
Overnight action’s new info…
There was a momentary 9-10 point knee-jerk reaction down and up at the close, triggered by AMZN’s own initial earnings confusion. But the Globex session has only trended up. Attacking yesterday’s 2846.50 high to within 2 ticks before Europe’s opens had reacted down to 2842.75. Later surging 4 points pierced yesterday’s high by 2 ticks has reacted back down to 2842.75, again.
If, then…
No decline was indicated by yesterday’s pattern, only the vulnerability if buyers weren’t retaking control overnight. But, have they? Relentless overnight trending doesn’t always attract intraday reinforcements. And stronger-handed counter-trend sponsorship isn’t necessary to reverse the overnight trend — that can happen simply by the overnight trend’s sponsorship exiting. The opening 15 minutes of volatility often lets us know either way. It isn’t necessary to neutralize the “unfinished business above” at 2848.75 before reversing down, but I’ll be reluctant to short otherwise. Not reversing down would next target 2873.00 and potentially 2883.00, while this leg also requires at least an eventual third higher close. Anxiousness and anticipation ahead of this morning’s GDP is surely inhibiting and influencing price action, so a clearer picture should be visible after its release.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2846.50 would be likely to trigger the 2844.50 bias-up signal at 10:15. Exiting the open under 2840.75 would be unlikely to trigger bias-up.