Posts by Rod David
Mid-day Update… The upper-end holds.
Noon hour fully retraces morning rally.
Probing fresh highs up to 2663.00 before the noon hour was suddenly ambushed by a 16-point plunge. 
Its reaction into the noon hour was gradually retraced and then also ambushed by another 16-point plunge to 2635.00.
That was under the open’s pullback to 2638.50. It was only temporary, eventually retraced to touch this afternoon’s 2658.25 bias-up signal. Its reaction just probed 2 points under the afternoon’s 2648.00 bias-down signal.
Zuckerberg is still scheduled this afternoon. The White House press secretary’s daily briefing will likely be full of salacious and intriguing questions about yesterday’s raid on Trump’s attorney. I’m not expecting the market to accomplish anything new during those distracting televised events.
So, not already trending higher would be vulnerable to retracing back to session lows. Of course, breaking higher before the bias environment lapses would require being retraced, which could become a rubber band stretch that snaps back down.
Look ahead: Economic Calendar – for Wed Apr 11, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Zuckerberg is slated to return for a second day of congressional testimony. Did day-one provide a distraction that sucked out market volatility? Or, are the fireworks already spent, leaving only the boredom and ennui of congressional hearings that our grandparents used to describe around Sunday dinner? Meanwhile, any noticeable reaction to the pre-open CPI is likely to be duplicated by post-open reports, including the afternoon’s FOMC Minutes.
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
*FOMC Minutes
2:00 PM ET
Treasury Budget
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2658.00 | 2658.25 |
| …would target | 2666.50 | 2666.75 |
| Bias-down: under | 2647.75 | 2648.00 |
| …would target | 2637.75 | 2638.00 |
| Signal status: NO-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… Rewarding patience.
Restrained optimism absorbs impatient selling.
The wide overnight range around yesterday afternoon’s 2654.00 high was actually centered around 2648.00. Which is also the opening print. 
A blip-up to 2651.00 resolved down. Or, tried to resolve down. Repeatedly. Dips to 2643.00, 2641.00, and ultimately 2638.50 each recovered to 2648.00.
The last recovery was during the opening 15 minutes of volatility lapsing. Its timing suggested that sellers had failed. The reward for absorbing them was to retest their origin at 2651.00.
This being a renewed bias-up environment, the post-open rally is free to extend. It has. The overnight high is being attacked to within 1 point at 2657.00.
Already probing prior highs through the open would have been likelier to maintain traction, and to extend higher. Reactions down would have been likelier to recover. This morning’s rally may extend higher and recover dips, but sellers aren’t marginalized. Whether or not distracted by the Zuckerberg testimony, there will be vulnerability to reversing back down intraday.
The First Trade & Pre-open Tour Recording… One good turn.
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 gap up to 2619.00-2620.00 reacted down to 2613.00 before reversing up sharply. And a lot. For awhile. Trending up didn’t peak until the afternoon bias environment attacked 2654.00. Then it was all retraced back down to 2610.00 at the close. Friday’s last-minute high was overlapped by almost 2 points, but the gap back down to Friday’s 2603.00-2606.00 close wasn’t even attacked, let alone filled.
Overnight action’s new info…
Globex initially consolidated up to 2620.00 for several hours, then suddenly broke higher during Chinese Premier Xi’s speech. This morning’s 2625.75 bias-up signal and 2635.25 bias-up target each enforced a consolidation. And each consolidation resolved up, eventually surging 4 points through yesterday’s high to 2658.00. Reacting down to 2638.00 held through midnight, defining a range that has contained price action since then.
If, then…
The overnight rally is not surprising, other than its size. I had noted at yesterday’s close and in the Market Wrap that Monday’s drop wasn’t necessarily bearish, and the burden of proof was on sellers. Stopping short of filling the Friday’s gap is not “ineffectual optimism,” because so much of Monday afternoon’s drop developed so late. And sellers didn’t gain traction for their efforts, with only the proxy window trending down. Also, even the session’s 44-point collapse developed in positive territory. Now, about the size of the overnight rally. Already retracing back to Monday’s highs all but requires a rally to probe higher through the open, or else the morning’s high will be in. Perhaps even the session high, as traders turn their focus to the televised spectacle of Facebook’s Zuckerberg giving congressional testimony.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2640.75 would be likely also to exceed the 2635.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2630.75 would be likely at least to trigger the 2625.75 bias-up signal at 10:15.