Posts by Rod David
Look ahead: Economic Calendar – for Fri Mar 22, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s first post-open econ report is reliable for triggering a price reaction. The two other post-open reports are neither high-profile nor reliable for influencing price action.
*PMI Composite FLASH
9:45 AM ET
Existing Home Sales
10:00 AM ET
Wholesale Trade
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 | 2549.50 | 2554.50 |
| …would target | 2555.25 | 2560.25 |
| Bias-down: under | 2840.00 | 2845.00 |
| …would target | 2832.50 | 2837.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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… Fourth time’s a charm?
Open’s surge rejects bias-down tests for bias-up trigger.
The pre-open Market Tour ended as an overnight bounce up to unchanged at 2827.00 began collapsing. 
It extended to 2815.00, and then blipped-down to 2813.75 in reaction to 8:30’s econ report. Firming from there greeted the open at 2820.00, where price immediately surged. And surged.
Suddenly the probe under this morning’s 2823.50 and 2816.00 bias-down parameters had become a threat to trigger the 2835.50 bias-up signal. Which did trigger, and just met its 2842.00 bias-up target. Persistently overbought 3-minute RSI remains persistently overbought.
Now might be an appropriate time to pause for a message from this week’s sponsor, the failed intraday rally. The pattern could be solid, and could be guaranteed to repeat again, multiple times. But not necessarily today. We’ll certainly monitor for a reversal setup, and keep the door open to retracing this morning’s surge, but a reversal could be delayed.
Back to regularly scheduled programming… Greeting the open back above yesterday’s lows and maintaining that recovery forms an Isolation setup. Avoiding yesterday’s lows today and tomorrow would target a retest of this week’s ~2860.00 high, which exiting the bias environment above its 2842.00 bias-up target would help. Rejecting the setup today would be very bearish, and once again there is no “unfinished business” above. Back under 2837.50 would suggest a reversal is underway.
The First Trade & Pre-open Tour Recording… Uh-oh, another rally retraced.
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…
Despite Wednesday’s unusual probe under the prior session’s 2829.00 low — unusual, for developing ahead of the afternoon FOMC events — the session was an awesome display of the If-Then analysis’ utility. The FOMC day context told us that extending so low as to attack 2817.00 from Tuesday’s 2841.00 close was weak-handed all the way. And that told us the overly-discounted FOMC news was almost impossible not to react favorably. In fact, the policy statement was greeted at 2825.25, already long from 2822.00 after a failed long-entry at 2825.25, and its reaction surged to 2842.50 and 2849.00. Then the no-bias environment context told us that everything above the 2828.75 bias-up signal was “no-bias trending” requiring retracement. In fact, it was retraced entirely before the position-squaring window opened, and retested into the close. Which also fulfilled the bigger picture context of the recent distributive pattern I began highlighting Monday, producing its third consecutive failed intraday rally.
Overnight action’s new info…
No-bias trending can also be attracted to retracing its 1:20 print. That was essentially 2823.25, and it was met before the Globex open. Its test reacted up from 2822.75 to pierce this morning’s 2835.50 bias-up signal, and then retraced entirely through Europe’s opens to eventually attack 2820.00. Now a bounce to yesterday’s 2827.00 futures close has collapsed to fresh lows testing 2819.00.
If, then… (notes to accompany the Tour recording)
The ongoing pattern of retracing intraday rallies just retraced its third. It was both the biggest retracement AND from the lowest levels. Now an overnight rally — not an arbitrary bounce, but a bounce up to this morning’s bias-up signal — has been retraced already. Yesterday’s intraday rally makes it seem that buyers are strong and willing. But that was a function of the deeply oversold condition that greeted the rally’s FOMC catalyst. More important is the intraday rally’s complete reversal, and now immediately following it comes last night’s reversal. All of which makes it seem that strong-handed sellers are losing patience waiting for rallies to sell. Not recovering yesterday’s highs today, let alone trending down to fresh lows, could keep the market on defense into and out of the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2818.75 would be likely to trigger the 2823.50 bias-down signal at 10:15. Exiting the open above 2825.25 would be unlikely to trigger bias-down. Exiting the open under 2830.75 would be unlikely to trigger the 2835.50 bias-up signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2830.25 | 2835.50 |
| …would target | 2836.75 | 2842.00 |
| Bias-down: under | 2818.25 | 2823.50 |
| …would target | 2810.75 | 2816.00 |
| Signal status: BIAS-UP, TESTED BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.