Posts by Rod David
Mid-day Update… No reinforcements, either way.
Temporary probe of fresh highs is retraced, not rejected.
Extending higher this morning depended entirely on attracting post-open reinforcements to what was very likely going to probe overnight highs.
In fact, a quick surge touched this morning’s 2741.50 bias-up target, and then collapsed.
Well, collapsed to a relative degree, relative to an otherwise narrow range. The bias environment low attacked, touched and pierced 2733.00. But momentum never reversed down.
Now an interim bounce up to 2739.00 has been reversed back down to the morning’s lows. The 2730.50 bias-down signal could be tested during this afternoon’s no-bias environment, but it’s not required.
This morning did leave “unfinished business below” at its 2727.25 bias-down signal. The late no-bias had also rejected a test of the bias-up target, so an offsetting test of the morning’s 2721.50 bias-down target, so an attraction to it is in-play, albeit not required.
Back above 2737.50 would start to signal momentum reversing up. That’s still a possibility. Except for today’s intraday lower and lower highs, that’s a likelihood. Especially until sellers are more productive than just retracing bounces back down to unchanged — and so long as the 2732.00 upper-end (now “lower prior high) of last Monday afternoon’s range holds as support.
Look ahead: Economic Calendar – for Wed May 23, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar is steadily busy, but not a lot. The first post-open report has a track record for influencing price action. Not the next report, although it will be relevant this week when multiple Housing sector data are released. The afternoon’s FOMC Minutes has gotten less influential in its reactions, but usually inhibits volatility ahead of its release The pre-close Fed speaker had negligible impact when speaking Tuesday morning.
MBA Mortgage Applications
7:00 AM ET
*PMI Composite Flash
9:45 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
*FOMC Minutes
2:00 PM ET
*Neel Kashkari Speaks
2:15 PM ET
William Dudley Speaks
4:15 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2740.50 | 2740.00 |
| …would target | 2748.25 | 2748.00 |
| Bias-down: under | 2738.75 | 2730.50 |
| …would target | 2723.00 | 2723.00 |
| 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… No takers.
Obligatory high, attracts no reinforcements.
Attacking yesterday’s 2739.25 high overnight to within 1 tick was not pessimism. Stopping short overnight is not pessimistically short, because overnight can’t be compared so directly to intraday action. But it was a retest. And it was ongoing right before the open. No longer being overnight, but pre-open, it had become ineffectual pessimism.
An obligatory fresh high had become likely. Maintaining the fresh high depended on whether reinforcements would be attracted. They weren’t.
Quickly surging to touch the 2741.50 bias-up target quickly held. Bias-up target tested and held. Another bounce also failed, and resolved down to 2733.00. The 2735.25 bias-up signal’s grace period didn’t recover, so this is a no-bias environment, whose target has been met.
Still testing 2733.00 is delaying something, but what. Holding the bias-down signal’s test would have targeted new highs. Holding clean tests both bias-up parameters puts into play an offsetting test of both bias-down parameters.
The First Trade & Pre-open Tour Recording… Rally, or else.
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…
Yesterday was choppy and busy, but is essentially defined by 2-3 bigger surges and their retracements. Sunday night’s gap up from Friday’s 2712.00 close extended up to 2736.25. That was a sentiment extreme and spent the balance of the night retracing down to 2724.50. Monday’s opening surge retested it, and then probed it by 3 points up to 2737.25. The balance of the morning was spent retracing that to within 3 ticks of the overnight low at 2725.25. An afternoon bounce recovered only to the overnight high before ranging sideways into the 2733.00 close. The close was still overlapping the upper-end of last Monday’s 2725.00-2732.00 consolidation.
Overnight action’s new info…
An initial calm soon began firming, and then rallying, and eventually extended back up to within 1 tick of yesterday’s 2739.25 high. Not being intraday, that isn’t considered as stopping pessimistically short, but it is a retest. And it’s interesting that there was no defensive posturing ahead of Europe’s opens, which is optimism.
If, then…
Testing the lower-end of last Monday’s 2725.00-2732.00 consolidation last week had reacted down several times, sometimes considerably. Closing decisively above the consolidation’s upper-end would have signaled a new upleg underway. Since still overlapping 2732.00 at yesterday’s close hasn’t reversed down overnight, quickly attracting reinforcements could still extend a breakout up to 2751.00 before failing. Quickly attracting reinforcements, or not, could dictate the balance of the session — especially after a single-minded overnight rally, which is inherently vulnerable to reversing at the open.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2737.50 would be likely to trigger the 2735.25 bias-up signal at 10:15. Exiting the open above 2743.00 would be likely also to exceed the 2741.50 bias-up target at 10:15 to renew the bias-up signal.