Posts by Rod David
Mid-day Update… Pins AND needles.
Waiting for the FOMC news.
Opening at the morning’s 2792.50 bias-up signal eked higher through the morning to touch the 2796.00 overnight high. That’s an intraday test above prior intraday highs. Trending back down through the noon hour probed the open’s 2790.75 low by 3 ticks. That’s the minimum margin to make the fresh low non-arbitrary.
Rejection of a fresh high? Maybe. Maybe a premature warning. Maybe a false warning.
This morning’s bias-up signal triggered, and its 2798.00 bias-up target has become “unfinished business above.” A decline could form first, and be productive. That’s not common, but neither are FOMC policy statements. Regardless, an initially favorable knee-jerk reaction up that reverses back down is the most bearish scenario. Ultimately trending up above overnight highs is the most bullish.
Don’t forget that the policy statement is followed a half-hour later by the Fed Chair’s quarterly Q&A. This tends to be the month’s most opportunistic window for quick, big moves. Be careful if positioned already ahead of either news.
Look ahead: Economic Calendar – for Thu Jun 14, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: FOMC is followed Thursday by the ECB, which is followed by Mario Draghi’s press conference. Although the calendar remains active for the day, none of its reports have a track record for influencing price action. Meanwhile, World Cup Soccer “kicks” off. It lasts a month, but its greatest distraction is early before any countries are eliminated.
*ECB policy statement / Draghi Q&A
7:45 AM / 8:30 AM ET
Jobless Claims
8:30 AM ET
Retail Sales
8:30 AM ET
Import and Export Prices
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Business Inventories
10:00 AM ET
EIA Natural Gas Report
10:30 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 | 2793.75 | 2798.00 |
| …would target | 2799.75 | 2804.00 |
| Bias-down: under | 2785.00 | 2789.25 |
| …would target | 2778.25 | 2782.50 |
| Signal status: NO-BIAS | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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… Slow-going.
No apparent appetite for risk.
The open’s gap up was under prior highs. So, a reversal down won’t be required to retest it. Actually, a reversal down never really materialized. But it took a long time before trending developed.
Trending did develop. Or, at least an attempt. Fluctuating around the 2792.50 bias-up signal finally triggered it. that has extended to a fresh post-open high at 2795.00. But there seems to be no rush in extending.
Nevertheless, this is a bias-up environment. Fresh post-10:15 highs are already printing, which reinforces the signal. Nevertheless, back under 2791.50 would start to suggest a sooner downdraft.
The First Trade & Pre-open Tour Recording… Another overnight tease.
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’s late drop to 2784.00 had defined the overnight range, which was tested repeatedly to as low as 2782.25. Tuesday’s open was greeted back at the overnight range’s 2791.00 upper-end, which eventually extended up to 2794.00 at noon. Dropping into the final hour attacked the 2782.25 overnight low, where one more bounce took price back up to 2791.00. No new “unfinished business” was left outstanding, while the relevant 2793.00 level held a second consecutive test.
Overnight action’s new info…
Tuesday’s final hour bounce extended into the Globex open, and soon probed fresh highs up to 2796.00. The probe above the prior session’s highs — like Sunday night’s probe of fresh highs — was retraced back under prior intraday highs to 2789.25. Retraced, but not necessarily rejected. Now yesterday’s 2794.00 high has been recovered.
If, then…
The pattern remains alive as another probe above prior highs is reversed. Last night was the second overnight reversal, and yesterday’s intraday reversal originated from a couple of ticks short of a fresh high. So, today may be the last opportunity for the distributive pressures to prove whether its sponsorship has been strong-handed. The strong hands in this pattern may have been patient sellers letting buyers expend their energy. The pattern often ends in a threatening downdraft that extends or is miraculously saved, accelerating in either direction. This series of higher highs hasn’t yet included sucha make-or-break crossroads, but the combination of failed probes while creeping closer to the 2800.00 area makes a reckoning likelier.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2790.75 would be unlikely to trigger the 2792.50 bias-up signal at 10:15. Exiting the open above 2795.00 would be likely to trigger bias-up.