Posts by Rod David
Mid-day Update… Stuck in the mud.
Decline and recovery both getting nowhere. Slowly.
The ranges are different with each timing window. But the market is range bound.
The open’s collapse ultimately triggered no-bias by holding a test of the morning’s 2835.50 bias-down signal. The balance of the bias environment was contained between the 2835.50-2843.00 bias signals. Probing higher into the noon hour was only temporary, and didn’t extend. But its reaction down only touched the afternoon’s 2840.75 bias-down signal, and didn’t trigger.
Back under 2841.50 would be credible for starting to break lower. Especially if the bias environment lapsing is at least within view. Meanwhile, there’s still potential for bouncing back to the highs. This morning’s last dip and now this afternoon’s last dip each had potential to extend down — and didn’t. Probing back above 2848.00 again this late in the day could marginalize sellers.
Look ahead: Economic Calendar – for Fri Jan 26, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s two simultaneous pre-open reports are high-profile. Only Durable Goods has a track record for influencing price action. Any obvious reaction to it would likely be duplicated by post-open reports — there aren’t any, but it could still be a guide for anticipating the resolution of any knee-jerk reactions.
*Durable Goods Orders
8:30 AM ET
GDP
8:30 AM ET
International Trade in Goods
8:30 AM ET
Retail Inventories [Advance]
8:30 AM ET
Wholesale Inventories [Advance]
8:30 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 | 2848.50 | 2848.75 |
| …would target | 2854.00 | 2854.25 |
| Bias-down: under | 2840.50 | 2840.75 |
| …would target | 2832.25 | 2832.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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… The market stabs back.
Taking a stab at resuming the rally has failed.
The overnight rally had consolidated an attack on 2850.50. A pre-open knee-jerk reaction to news surged to 2853.75, and then drifted to greet the open at yesterday’s 2848.00 opening
print. Its attraction is neutralized. And there is no requirement to retest the pre-open high.
Since yesterday’s close I’ve been describing the distributive pattern forming. Early strength has become likely to be rejected early. This morning’s open offered an excellent — if not also extreme — example. The first half-hour plunged to 2833.75.
Bias is being influential, but also contradictory. Rejecting tests of both bias-up parameters puts into play offsetting tests of both bias-down parameters. But the 2835.50 bias-down signal was still being tested at 10:15 to invoke the grace period. And it held through 10:30 to trigger no-bias.
The 2843.00 bias-up signal should define the no-bias environment’s upper-end. It’s being tested now. Exceeding it this morning would be “no-bias trending” that requires being retraced. Holding it has room down to the 2835.50 bias-down signal until the no-bias environment lapses, or else probing any lower would also be no-bias trending. The most bearish scenario would start dipping again, and break lower into the afternoon.
The First Trade & Pre-open Tour Recording… Making another break for it.
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…
Wednesday’s gap up to 2348.00 was briefly consolidated before surging to attack 2855.00. RSIs diverged negatively on its retest, presaging a 30-point drop to 2825.50. The afternoon bounce probed a couple of points back above Tuesday afternoon’s highs up to 2845.25. It held as resistance through the close to prevent the afternoon’s buyers from regaining traction for their effort. However, Tuesday afternoon’s last relative lows at 2837.00 were recovered to prevent the morning’s sellers from gaining traction for their effort. Meanwhile, “unfinished business below” was created by the afternoon’s “bias-down rally” which requires retracing its 2835.50 bias-down signal that was recovered prematurely. Also left outstanding was Wednesday’s 2848.00 opening gap which requires an intraday retest.
Overnight action’s new info…
Initially dipping through the Globex open pierced the 2835.50 attraction below by 1 tick before bouncing 8 points to test what is this morning’s 2843.00 bias-up signal. Its retracement down into Europe’s opens came within 1 point of the earlier low. Reacting back up has extended to fresh highs probing yesterday’s 2848.00 open by 2 points — also probing what is this morning’s 2849.25 bias-up target.
If, then…
Last night’s initial dip neutralized the required retest of 2835.50. Its recovery can’t neutralize the 2848.00 attraction until the open. And its probe is already testing the objective’s room for noise, with ECB, Draghi, and four pre-open econ reports yet to have their impacts. Almost any higher would become likely to probe yesterday’s 2855.00 high, and then 2872.25. Meanwhile, a new observation suggests otherwise. Yesterday’s drop rivaled last Tuesday’s 39-point high-to-low intraday drop. Yesterday’s low retraced 61.8% of the distance back down to the 2809.50 origin of last Tuesday’s drop. Several other Fibonacci relationships between the two drops and their interim price action all suggest the one-week, 85-point move reflects the same sponsorship. This implies that intraday behaviors will repeat. Not extending higher intraday is becoming likelier, as is an intraday rejection of morning strength. So, maintaining the rally depends on not rejecting early strength early.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2850.50 would be likely also to exceed the 2849.25 bias-up target through 10:15 to renew the bias-up signal, next targeting 2855.00. Exiting the open above 2845.50 would be likely at least to trigger the 2843.00 bias-up signal at 10:15.