Posts by Rod David
Mid-day Update… And a programming note.
I’M AWAY FROM THE SCREENS FOR TODAY’S LAST 90 MINUTES.
THERE IS NO MARKET WRAP.
Our long, national nightmare is over. Those lines on the nearby chart were all actionable if probed beyond their first 3 minutes.
Actually, it wasn’t as bad as that. It was worse. We had warning — if not of a “dry cleaners morning,” then at least from a noN-bias signal.
Nevertheless, it’s always astonishing in one way or another how torturous and frustrating the market can whiplash itself about.
The first hour’s range was resisted by its 2645.50 bias-down signal. It essentially supported the balance of the morning. Every test of the range’s 2650.50 inflection point above was only overlapped and never exceeded its first 3-minute extreme. The same went for its 2643.00 inflection point below.
As often happens with such mornings that do resolve the same day, their resolution tends to be swift. In fact, this afternoon’s 2650.50 bias-up signal was triggered on the way to its 2660.75 bias-up target several minutes later. Its reaction down is now probing fresh highs at 2663.00.
Room for noise above the gap back to yesterday’s 2654.00-2654.75 close is 2663.75, being attacked now to within 1 tick. Exiting the bias environment any higher would next target 2673.75 and potentially also 2684.00. Otherwise, until neutralizing overbought RSIs at the high, the nearest sell signal would trigger back under 2651.75.
Look ahead: Economic Calendar – for Wed Feb 14, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s Retail Sales is always high-profile, but rarely influential to price action. Being released simultaneously with CPI might give it more sway this month, if only to establish a pre-crash baseline.
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
*Retail Sales
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Business Inventories
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2652.25 | 2650.50 |
| …would target | 2662.25 | 2660.75 |
| Bias-down: under | 2641.25 | 2639.75 |
| …would target | 2634.75 | 2633.00 |
| Signal status: BIAS-UP | FAQ | |
| NEW! 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… Stuck.
Overnight pullback neither expending nor recovering.
The opening minute quickly touched the 2636.25 pre-open/overnight low, then bounced to the 2645.50 bias-down signal. This characterization of the open almost serves to define the rest of post-open price action. 
The 2637.50 bias-down target held repeated tests and attacks as support, while the 2645.50 bias-down signal also held repeated tests as resistance.
The picture didn’t get any clearer. Still testing the bias-down signal within 3 minutes of 10:15 invoked the grace period through 10:30, which was still overlapping the bias-down signal. This is a noN-bias environment. Not bias-down targeting a retest of its 2637.50, and not no-bias targeting tests of the bias-up parameters. The bias parameters are still influential as support and resistance, but there tests don’t require a specific resolution.
Meanwhile, the grace period did probe a fresh post-open high up to 2650.25. Yet, that was retraced in time to avoid recovering the 2645.50 bias-down signal. The setup would have been pretty bullish, putting into play offsetting tests of both bias-down parameters. Not exploiting the setup in-time to trigger tends to be as bearish as it could have been bullish. That started to develop with a reaction down to 2640.00, but now fresh highs are being probed up to 2652.75.
noN-bias is unpredictable, other than identifying its support and resistance. Exiting the bias environment at 11:30 above or below its 2645.50 bias-down signal could offer more reliability for the next leg. But what we do know at this stage is that weak-handed buyers are still stretching the rubber band, probably gaining no traction for their effort.
The First Trade & Pre-open Tour Recording… Raining cats, not yet dogs.
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…
Friday afternoon’s rally off of its 2630.00 low resumed Sunday night, albeit shallower. But it unfolded in two segments that hesitated at 2637.50 and 2655.00, which are 38.2% and 61.8% extensions of the relevant segments of Friday afternoon’s rally — so, presumably the same sponsorship. A post-open 30-point pullback stopped optimistically short of filling the gap back to Friday’s 2618.25 close. Those optimists were sorely missed just when they were needed most, to maintain the afternoon probe of fresh highs up to 2671.50. The closing dip to 2645.75 probed back under the morning’s 2654.25 high, missing a final opportunity for the intraday rally to gain traction for its efforts. Which continues to suggest the bounce is only a temporary correction.
Overnight action’s new info…
Where Sunday night’s open immediately retraced Friday’s late reaction down from fresh session highs, yesterday’s late reaction down has extended lower overnight. Not for lack of trying — a bounce up to 2659.25 soon reversed back down, extending to 2636.25 out of Europe’s opens and consolidating up to 2644.00 for several hours. That ranging just broke higher, now touching 2648.00.
If, then…
Yesterday’s expenditure of buying pressure failed to close above relevant resistance, which continues to suggest the bounce is only a temporary correction. A proverbial “dead cat bounce.” The overnight dip isn’t yet deep enough to prove it isn’t just correcting yesterday’s rally. Anyway, a lower open would still require being maintained through the open to influence intraday action. Meanwhile, absorbing a weaker open could be rewarded by retesting yesterday’s highs up to 2673.75.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2650.50 would be unlikely to trigger the 2645.50 bias-down signal at 10:15. Exiting the open under 2640.75 would be likely to trigger bias-down.