Posts by Rod David
Mid-day Update… Stepping back from the precipice.
Fresh lows testing critical support.
Renewing this morning’s 2635.25 bias-down target at 10:15 would have next targeted 2623.00. Probing down to 2634.00 was recovered in time to avoid renewing the signal, 
but it was still a bias-down environment. Never mind that. Holding the bias timing window didn’t prevent trending down through the bias environment, a not so rare exception to the usual.
The morning’s 2626.50 low reacted up to test the open’s 2634.00 low as resistance. Consolidating through the noon hour finally broke lower to within 1 tick of 2623.00. And this afternoon’s 2625.25 bias-down signal just triggered noN-bias — the bias-down target isn’t in-play, and the bias-down signal need not define the window’s low.
RSIs aren’t oversold at the errant tick’s low, so its retest isn’t required. Extending down further will be difficult anyway during today’s lower participation and ahead of post-close AAPL earnings. That might require sponsorship and reinforcements, whereas bouncing this afternoon only requires that sellers step back.
Look ahead: Economic Calendar – for Wed May 2, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Apple earnings are due after Tuesday’s close, which might set a tone for Techs on Wednesday. But after the pre-open ADP report gives a glimpse of sentiment ahead of Friday’s Employment Situation report, focus will turn to the afternoon’s FOMC policy statement — which is reliably volatile.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Treasury Refunding Announcement
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Meeting Announcement
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2634.75 | 2634.00 |
| …would target | 2641.75 | 2640.00 |
| Bias-down: under | 2626.75 | 2625.25 |
| …would target | 2618.75 | 2617.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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… One window’s floor is another window’s ceiling.
Overnight lows broken easily through the open.
The last pre-open bounce had retraced overnight highs by 61.8% to test 2649.25. 
A head & shoulders pattern formed that was already resolving down to open back at the 2641.25 overnight lows.
Not isolating the overnight probe made 2635.00-2638.00 likely to be tested next. Post-open action trended down into it, bounced to touch the 2642.75 bias-down signal, and then probed under the range to 2634.00.
The 2635.25 bias-down target was not exceeded through the 10:15 bias timing window, so the bias-down signal was not renewed. But it is still a bias-down environment, vulnerable to extending. Usually it doesn’t extend when the bias target’s test has held. Today is extending — at least, probing lower — to 2630.50.
Exiting the bias environment under its 2635.25 bias-down target would suggest the next lower objective is in-play at 2623.00. Having probed fresh lows after 10:30, exiting bias environment back above its bias-down target would suggest that sellers are done.
The First Trade & Pre-open Tour Recording… Isolation opportunity.
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…
The week started by tracking the topping template of testing 2681.00 and rejecting it back under 2677.00. The reversal was likely but not required. And it had to develop through a relevant timing window, which it did, as the morning slid to 2663.00 and the afternoon extended down to 2646.00. The reversal was likely a delayed reaction to headlines announcing Netanyahu’s planned speech, and the speech’s eventual delivery helped the decline to extend sharply lower. An anchor of sorts had formed by holding above 2677.00 through the morning’s bias timing window, which was capable of launching another probe of fresh highs. So, there is a question outstanding whether the decline was artificial and recoverable, or organic and on its way lower.
Overnight action’s new info…
Monday’s late 13-point drop from 2659.00 to 2646.00 extended without delay to 2641.25 through the Globex open. That leg was retraced by 61.8% to attack 2654.00 ahead of Europe’s opens. But Europe’s open were having none of it, and the earlier low was attacked to within 3 ticks. Now that leg has been retraced by 61.8% to 2649.25.
If, then…
Monday’s decline didn’t gain traction, so gapping up above its 2658.50 prior highs would likely reverse the trend back up. That’s not currently indicated, but for future reference, the minimum reward for reversing yesterday’s trend before it gains traction would be to probe fresh highs up to 2684.25. It would also prove the decline’s catalyst was artificial. I noted in yesterday’s Market Wrap that the artificial catalyst can still be productive down to 2641.50-2641.75, which overnight action has now tested — and its test was clearly influential by the bounce it produced. A temporary bounce, but maintaining an open above yesterday’s 2646.00 low can isolate the overnight probe and try reversing the trend up. Not yet reversing up through Tuesday’s open would next target 2635.00-2638.00. And then 2623.00, back into position for toppling the dominoes below.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2650.75 would be unlikely to trigger the 2642.75 bias-down signal at 10:15. Exiting the open under 2641.50 would be likely to trigger bias-down. Exiting the open above 2656.75 would be likely to trigger the 2653.25 bias-up signal.