Posts by Rod David
Mid-day Update… Passing that point.
Probing the same pullback limit that had held already last week.
The pullback into last week’s lows had to hold 2701.50 through any relevant timing window to remain a pullback. Plunging into its test last Wednesday afternoon had initially extended overnight to 2682.00. Recovering the excess through Thursday’s open had formed the Isolation reversal setup.
That reversal setup was productive. Extending it probed the pullback’s origin for new recovery highs. There’s no bullish reason to revisit that upleg’s origin — i.e. 2701.50.
2701.50 was probed during the noon hour, and broken sharply exiting the noon down to 2680.25. At least 1-minute RSI is diverging positively at the low, which just reacted up to 2692.50. Exiting the bias environment back above 2701.50 would help to suggest the interim break was sponsored only by weak-handed sponsors. Otherwise, the next downleg is likely already underway.
Look ahead: Economic Calendar – for Fri Mar 2, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday morning’s only econ report is both high-profile and reliable for influencing price action. More so lately with their being greater focus on inflationary pressures, and this being an opportunity to gauge the willingness to absorb them.
*Consumer Sentiment
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 | 2726.75 | 2726.50 |
| …would target | 2733.25 | 2733.00 |
| Bias-down: under | 2712.00 | 2711.75 |
| …would target | 2697.25 | 2697.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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… Ranging again.
Fresh lows get squeezed as their catalyst evaporates.
Yesterday afternoon’s pessimism was proved to have overly-discounted this morning’s Fed chair testimony. Yesterday afternoon’s pessimism, the overnight pessimism, and then 
the post-open pessimism.
That last bit of pessimism was a pre-open recovery that let the open touch a 2720.00 buy signal instead of triggering it. Its reaction down attacked the overnight low and this morning’s 2698.25 bias-down target. The 2707.50 bias-down signal avoided triggering thanks to a grace period. The offsetting test of its 2726.00 bias-up signal was quickly fulfilled, probing it by 5 points.
That’s also a test of what had been yesterday’s next lower objective at 2729.00. Its resistance has reacted down to within 3 ticks of 2707.50. Nothing prevents the reaction from extending down to fresh lows. Nothing except the 2707.50 bias-down signal whose test should now define the window’s lower-end. Until the window starts lapsing.
Back above 2718.25 would start to signal the reaction down may have been absorbed. Meanwhile, the next lower objective is fresh lows at 2693.50, and potentially resuming the decline. THE decline.
The First Trade & Pre-open Tour Recording… No argument.
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…
Ranging sideways overnight had briefly probed under Tuesday’s intraday lows, but Wednesday’s open gapped up. The gap up was immediately retraced, but not enough to probe back under Tuesday’s lows, forming the basis of an Isolation setup. The bias-up signal triggered, too, after already having come within 2 points of its target. Both setups were invalidated — by probing back under Tuesday’s lows and by exiting the bias environment under its bias-down signal, respectively. Neither rejection equated to a sell signal, but an afternoon recovery back into positive territory ended when the bias environment began lapsing. The balance of the session plunged 47 points to retrace almost all of the past week’s rally.
Overnight action’s new info…
The late intraday plunge to 2712.00 was initially consolidated back up to 2722.50. Another smaller collapse suddenly fell to 2703.00, which began another consolidation through midnight. A hopeful rally back to the earlier highs greeted Europe’s opens. But hovering there narrowly for another hour wasn’t hopeful enough to avoid sliding back down to the overnight lows. And now lower, having just touched this morning’s 2698.25 bias-down target, where last Wednesday afternoon’s plunge had closed.
If, then…
For all of the recent selling, a new downleg hasn’t yet been triggered. There certainly are reasons to suspect that sellers are stronger-handed. Such as, rejecting the bias-up three times in two days, which is distributive but not a trigger. Retesting the original pullback’s 2701.50 limit — whose test last week had reacted up into Tuesday morning’s high — isn’t necessarily bullish, but it’s not bearish without closing below it. And now the same can be said of a recovery. While yesterday’s renewed selling may be no more than pessimism ahead of Fed chair Powell’s Senate testimony today, a relief rally after he appears won’t be enough to suggest the recent low’s retest has held. The only early reliable setup from the overnight pattern would require the open to probe above its 2722.50 high. Anything shallower will remain vulnerable to probing lower intraday, regardless of its resolution.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2701.50 would be likely to trigger the 2707.50 bias-down signal at 10:15.