Posts by Rod David
Mid-day Update… Weekend slowdown?
Momentum disappearing at session highs.
The post-open dip to this morning’s 2793.50 bias-down signal held its test through 10:15. That put into play an offsetting test of the morning’s 2804.00 bias-up signal. The target was met within the hour, nice.
RSIs diverging into the morning bias environment exit had suggested momentum was rolling over. Taht would have been nice, too. Then came the news.
The Russia indictments headline triggered a knee-jerk reaction that attacked 2800.00. The artificial selling pressure crowded out the organic deterioration. The effect isn’t compounded, but replaced.
Anyway, now we all know that the administration isn’t affected by the indictments. So… relief rally! Right? Actually, the post-open 2806.25 high has only been touched. And only momentarily as its reaction is testing 2802.00 — the afternoon’s 2805.50 bias-up signal could have triggered but did not.
The shallow reactions suggest that Friday afternoon’s usual lethargic influence has begun. This doesn’t prevent trending any more, or retracing, but the predictability and reliability is inhibited.
Look ahead: Economic Calendar – for Mon Jul 16, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s calendar has a somewhat unusual start to the week with two high-profile reports released before the open. Only one is reliable for influencing price action.
*Retail Sales
8:30 AM ET
Empire State Mfg Survey
8:30 AM ET
Business Inventories
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2803.50 | 2805.25 |
| …would target | 2809.75 | 2811.50 |
| Bias-down: under | 2793.50 | 2795.50 |
| …would target | 2786.00 | 2788.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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… Slowing down into the weekend.
Open easily absorbs overnight reversal.
Probing overnight above yesterday’s high and then exiting the open under the earlier overnight low would have been very bearish. 
Probing overnight above yesterday’s high and then holding a test of the earlier overnight low would have been as bullish as the other setup would have been bearish.
This morning did neither. And not for lack of proximity. Just for lack of trying.
The 2797.00 earlier overnight low had been probed down to 2795.50 several hours before the open. Its reaction still hovered just above 2797.00 right into the open. But the reaction’s 2801.50 high was retested, and the 2797.00 earlier overnight low was ignored. Neither the setup nor its rejection developed.
That wasn’t in itself bullish, but missing a bearish opportunity is relatively bullish. This didn’t prevent reversing back down anyway, but the burden of proof was on sellers. And they barely touched the 2793.50 bias-down signal. Then failed to trigger it.
Having held a test of the bias-down signal, an offsetting test of the 2804.00 bias-up signal is in-play. Any higher would open the door to 2709.00 and 2713.00. Back under 2797.00 again would not necessarily reverse momentum down, but it would at least suggest another detour to extending the rally.
The First Trade & Pre-open Tour Recording… A lively night.
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…
Trending up throughout Wednesday night probed above Wednesday’s intraday high at Thursday’s open up to 2791.00. It quickly reacted down to 2782.75 throughout the entire opening 15 minutes of volatility. The balance of the session wouldn’t seem so, but that opening drop created a position of weakness. Any rally it produces should be doomed to failure, which has yet to be evident as of Thursday’s close. Instead, the overnight rally resumed and extended up to 2800.50 through the noon hour’s exit. The balance of the afternoon ranged sideways down to 2795.00, or several ticks lower. The afternoon’s bias-up signal had triggered, leaving outstanding its 2804.00 bias-up target.
Overnight action’s new info…
Thursday afternoon’s pause soon ended after the Globex open, trending up to fulfill the intraday unfinished business at 2804.00. Consolidating there eventually resolved up to 2807.25, but only briefly. The extension above 2804.00 was retraced into Europe’s opens, then the extension above yesterday’s ~2800.00 highs was retraced after Europe’s opens. More so, the earlier overnight low was probed down to 2795.50. Its reaction attacked 2801.00.
If, then…
Despite a very last-minute surge that touched 2801.00, Thursday’s closing action was still overlapping Tuesday’s 2797.75 highs. Settling above it was too late to trigger a higher objective. Like Thursday’s opening “position of weakness,” that doesn’t prevent first probing higher, first. And it hasn’t. Separately, another setup has touched February’s 2800.75 “Pivotal” high, which puts into play a test of the 2809.00 and 2813.00 actual highs. Last night’s rally up to 2807.25 does not fulfill either of those targets. But neutralizing yesterday’s 2804.00 “unfinished business” and the near-term buying pressure that had created it. The door remains open to a downdraft before fulfilling the upside objectives, and having returned to the earlier overnight low, that downdraft would be more credible immediately than delayed.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2797.00 would be unlikely to trigger the 2804.00 bias-up signal at 10:15. Exiting the open above 2806.25 would be likely to trigger bias-up.