Posts by Rod David
Look ahead: Economic Calendar – for Fri Jun 8, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s econ report has no track record for influencing price action. That said, being the morning’s only report would amplify any reaction from a surprise. Otherwise, the morning will trade without economic influence.
Wholesale Trade
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2778.50 | 2781.75 |
| …would target | 2784.00 | 2787.25 |
| Bias-down: under | 2766.75 | 2770.25 |
| …would target | 2759.75 | 2763.25 |
| Signal status: LATE BIAS-DOWN | 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… Early buyers < Early sellers ^4.
Another opening surge gets swallowed whole.
Pulling back from overnight highs still held on enough to gap up. And that gap up recovered back to the overnight high, essentially. 
Then price collapsed, back down into yesterday’s range. That’s four times this week, every day. The pattern reflects distribution — stronger-handed sellers increasingly taking advantage of rising prices.
This pattern can persist indefinitely on the way to higher and higher highs. But it usually doesn’t. More and more strong hands tend to begin adopting the same pessimism. Which eventually leaves only the weakest hands holding long.
This pattern tends to end when it becomes too difficult to conceal. Collapsing 13 points within a half-hour is among the largest post-open reactions — not the largest, but the fastest.
This pattern can be most bearish when it leaves no unfinished business above. The 2780.25 opening gap was retested already from below, before rallying to within 1 tick of the 2783.50 overnight high. Nothing above requires a retest.
Nevertheless, there’s a bounce is underway. That fast collapse was actually the no-bias signal fulfilling its objective for an offsetting test of the 2771.25 bias-down signal. It was exceeded by a single sentiment extreme of 8 errant ticks. Recovering 2772.75 and 2775.25 could attack the open’s highs. But back under 2771.25 could launch another collapse, and prevent confirming yesterday’s breakout.
The First Trade & Pre-open Tour Recording… No rest for you-know-who.
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 gap up to the morning’s bias-up signal failed its attempt to extend higher, putting into play an offsetting test of the bias-down signal (2747.50 basis Sep). Probing back under Monday-Tuesday’s highs barely touched Tuesday’s cash session close before reversing back up. And up, and up, and up. The morning’s bias-up target was reached — but held into the noon hour, when recovering it could have invalidated the morning’s bias objective. The afternoon bias environment’s bias-up made no progress until the bias environment began lapsing. The delay was compensated by resuming the rally through its bias-up target. Buyers gained traction into the final hour, which might have been fulfilled by extending higher into and out of the close. Nevertheless, closing above the Monday-Tuesday multi-session range was a breakout, awaiting confirmation of a second consecutive higher close Thursday.
Overnight action’s new info…
Extending 2 points higher through Wednesday’s close to 2778.50 was retraced to 2774.00. Then the rally resumed into and out Europe’s opens to 2783.50. Reacting back down tested yesterday’s cash session close at 2776.00, which has bounced several points.
If, then…
REMINDER: The front-month rolls forward to Sep at Thursday’s open, which is trading at a 4-point premium to Jun... Already fulfilling the next higher objective yesterday at 2769.00-2770.25 — let alone trending through it — on the same day as first decisively exceeding its 2747.00-2751.00 trigger — isn’t likely to hesitate extending higher if the rally remains intact. Already dipping back down to unchanged does threaten to also test the earlier 2774.00 low, which would qualify as that hesitation. But maintaining a recovery above 2778.50 would be likely also to extend yesterday’s breakout.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2781.50 would be likely to trigger the 2779.00 bias-up signal at 10:15. Exiting the open under 2775.50 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2775.25 | 2779.00 |
| …would target | 2781.50 | 2785.25 |
| Bias-down: under | 2767.50 | 2771.25 |
| …would target | 2761.25 | 2765.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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.
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