Posts by Rod David
Look ahead: Economic Calendar – for Wed Jul 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The recent deluge of Housing sector data ends on Wednesday, and fittingly with definitive endpoints. Whether MBA apps and New sales confirm or diverge from the sector’s slowdown story that may be forming, markets will have something to digest. Any obvious reaction to the pre-open report is likely to be duplicated in reaction to the post-open report.
MBA Mortgage Applications
7:00 AM ET
New Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2827.75 | 2828.50 |
| …would target | 2835.25 | 2836.00 |
| Bias-down: under | 2819.75 | 2820.50 |
| …would target | 2811.25 | 2812.00 |
| Signal status: LATE BIAS-DOWN | 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… Anchors above.
Higher high likelihoods getting carried away.
As suspected, reversing the overnight uptrend back down was so difficult and unlikely that post-open action was likelier to extend the overnight rally. 
Already testing and retesting last week’s 2818.00 highs overnight had essentially fulfilled Friday’s Isolation setup. But as I described during the pre-open Market Tour, I would be reluctant to short before the room for noise had probed fresh highs of at least 2821.00.
A new rally leg sliced through that on the way to 2824.50. Another consolidation formed into the open.
The next higher objective would be the renewed bias-up target (assuming the 2817.50 bias-up target were exceeded through the 10:15 bias timing window). A sudden opening surge suddenly sliced through it on the way to attacking the next higher objective of 2829.50 within 3 ticks.
That post-open leg gave us insight into room for a pullback down to 2823.50. Until then, the rally had been sponsored by the Isolation setup, and its objective to retest last week’s highs. That buying pressure was being satisfied, and price had been higher only for a handful of days during the last week of January.
The actual pullback stopped at 2824.00, and now another rally leg is testing 2831.25. Exiting the bias environment above 2829.50 would put into play the next higher objective at 2836.00. Back under 2828.00 would threaten at least a detour that refuels buyers back down to 2821.00.
The First Trade & Pre-open Tour Recording… Isolation rewarded. And rewarded again.
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…
Sunday night’s retest of Thursday night’s lows down to 2792.50 wasn’t retested intraday, but Monday morning’s 2796.00-2797.00 lows did probe under Thursday’s intraday lows. The entire morning bias environment continually challenged Thursday’s intraday lows, fulfilling the bearish WedEX indicator. Its influence ended as the bias environment lapsed, isolating the probe of negative territory. Friday’s bullish Isolation setup immediately began influencing the balance of the session, which rallied through the close to touch “unfinished business above” at the afternoon’s 2812.50 bias-up target.
Overnight action’s new info…
The Globex open formed a small Ascending Triangle before soon resuming Monday afternoon’s rally. The Isolation setup’s 2818.00 retest was fulfilled by midnight up to 2819.50. Gradually sliding back down 3 points suddenly plunged another 5 points at Europe’s opens down to 2811.00. But it was straight back up from there until attacking the overnight high to within 1 tick.
If, then…
This is a big decision point for the market. Not necessarily in terms of timing, but at least in price. And not necessarily intraday price, but in terms of the close. There is no further unfinished business above as Tuesday’s open approaches, so the rally depends upon intraday action creating one before the close. Sellers aren’t precluded from creating an objective below, but signaling the trend reversing down is unlikely so far above the prior session’s highs. The retest of last week’s 2818.00 highs was always likely to be probed intraday, and the least room for noise above it is 2821.00. The renewed bias-up target would be 2825.25. Reversing down from either would start to rob buyers of their traction, but probably not reverse the trend down. So, the morning might not even try reversing down, and could be much more motivated to probe last week’s highs.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2820.25 would be likely also to exceed the 2817.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2813.25 would be likely at least to trigger the 2811.50 bias-up signal at 10:15.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2811.00 | 2811.50 |
| …would target | 2817.00 | 2817.50 |
| Bias-down: under | 2801.25 | 2802.00 |
| …would target | 2794.75 | 2795.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.