Posts by Rod David
Mid-day Update… And chat link.
We’ve switched back to the usual chaRTroom platform as Adobe assures us they’ve resolved their issues. CLICK HERE.
This morning’s bias-up signal was renewed by exceeding its 2687.50 bias-up target through 10:15. The renewed bias-up target at 2692.75 was met to within 3 ticks. Its retest formed a close-quarters Double Top while RSIs diverged negatively. Spiking down immediately to 2687.50 was recovered, almost entirely, to within 1 tick of the high.
Just for rejecting Friday’s late extension down as an anomaly, the renewed bias-up target should include a retest of Friday’s 2698.25 pre-open high. Its objective would be the 2700.00 area, if not also 2703.00. So, I’m keeping the sell signal somewhat removed from the range at 2687.75. Even then, a dip into the bias environment exit touched it.
Today is not a session-long rally setup. The pattern might behave that way for other reasons, but not reliably. And although rejecting Friday’s late collapse is bullish, a direct path higher isn’t assured.
Look ahead: Economic Calendar – for Wed Jan 3, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday morning’s ISM number has a track record for influencing price action. So does the afternoon’s FOMC Minutes, which can also inhibit volatility before its release.
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2693.25 | 2693.00 |
| …would target | 2699.75 | 2699.75 |
| Bias-down: under | 2685.00 | 2685.00 |
| …would target | 2679.25 | 2679.00 |
| Signal status: waiting for trigger | 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… Turning back.
More than Friday’s late dip is being retraced.
Friday’s Market Wrap had noted that the path up would begin by gapping back up above 2674.25. Essentially, the 5-7 point probe under it after the cash session close must be proved to have been an anomaly.
In fact, Monday night’s open gapped up to 2674.50.
The path higher had other demands, like triggering bias-up, if not also renewing it. In fact, overnight action eventually extended to probe this morning’s 2687.50 bias-up target by 3 ticks. Despite the open reacting down immediately to 2681.75, the 10:15 bias timing window was probing fresh session highs at 2690.00. Bias-up renewed.
The 2692.75 renewed bias-up target was just attacked to within 3 ticks. RSIs diverged negatively on its retest and reacted down immediately to 2687.50. The drop originated from a close-quarters Double Top, and its 2691.00 pullback limit hasn’t been probed deeper than its first 3 minutes, so the dip may be temporary.
Regardless, the renewed bias-up target is essentially a retest of Friday’s 2698.25 high, probably up to 2699.75-2700.75 and 2703.00. Otherwise, back under 2686.25 would start to signal the corrective bounce was done.
The First Trade & Pre-open Tour Recording… Not quite rejected.
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
[WE’RE USING A BACKUP MEETING ROOM TODAY]
Through the prior close…
Last year’s last day was preceded by an 11-point overnight rally to 2698.25 that probed the 2697.75 prior high. But it didn’t hold, and the open was greeted by a shallower gap up to 2693.75. And even that quickly triggered a sell signal under 2692.25 that extended lower in time to reject both bias-up parameters. 
An offsetting test of both bias-down parameters was put into play, and the balance of the afternoon trended down more shallowly to attack 2681.00. One more reaction up to 2686.50 was rejected by a collapse into the cash session close down to 2674.50, which futures extended down to 2668.75. All “unfinished business below” was neutralized.
Overnight action’s new info…
Monday night’s open gapped up to 2674.50, and extended higher to 2681.75. Trending back down eventually attacked the opening print to within 3 ticks at 2675.25. The trending’s last bounce has developed into a recovery to fresh overnight highs now attacking 2685.00.
If, then…
Gapping down and extending Friday’s late collapse would have been today’s likelier opening scenario, except for the weekend. That’s the least likely resolution when it develops ahead of the weekend. The special circumstances do allow a path higher that essentially treats Friday’s late collapse like an anomaly by gapping up above 2684.25. In fact, last night’s open did gap up above 2684.25. Which is the basis for a setup that can extend to retest Friday’s 2698.25 overnight high. But the open has to exploit the overnight recovery attempt, or else the morning could retest and possibly probe Friday’s late low.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2682.25 would be likely to trigger the 2679.75 bias-up signal at 10:15. Exiting the open under 2675.50 would be unlikely to trigger bias-up.
Phonetic dictation…
Unavailable today.