Posts by Rod David
Mid-day Update… No news would be better news.
Flynn statement rattles the market.
This morning’s no-bias had at least attacked its 2651.00 bias-up signal. No-bias trending above it would have been credible. Doomed, but credible. Then the news broke that Mike Flynn would please guilty, driving the market down sharply. Then another headline that Flynn claimed he was directed by Trump.
Tuesday afternoon’s “unfinished business below” at 2617.50 was neutralized to within 2-3 ticks. Its reaction up was undermined by 3-minute RSI being persistently oversold. 
Indeed, another plunge collapsed to touch 2605.00.
2605.00 was the next lower objective under 2617.50 that I described during this morning’s Market Tour. Its first reaction up tested 2627.00. This afternoon has extended higher to trigger the 2632.00 bias-up signal. Its 2637.50 bias-up target is now being probed up to 2640.00.
This morning’s collapse was triggered by a knee-jerk reaction to headlines. This is almost always retraced entirely, often sooner rather than later. The plunge’s 2649.00 origin is now only 9 points higher, having rallied 35 points off the low.
Meanwhile, the tax reform vote is scheduled to begin at 2:00. It’s very likely to pass, but the past two sessions already expressed a lot of favorable sentiment for that. An obligatory knee-jerk reaction to the vote could get the market back to the plunge’s 2649.00 origin — perhaps through it to also test 2654.00. Or the plunge’s origin may have been tested already.
No other optimistic development could be anticipated before the close. And the weekend’s impending illiquidity could trigger Friday Factors that influence selling into the close. New session lows would be possible, but not required. Just reacting down would be likely, although be careful of a bigger squeeze into the weekend — the Flynn news may have been overly-discounted, too.
Look ahead: Economic Calendar – for Mon Dec 4, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: One post-open report Monday is high-profile, but has no track record for also influencing price action.
Factory Orders
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2632.75 | 2632.00 |
| …would target | 2638.00 | 2637.50 |
| Bias-down: under | 2619.50 | 2619.00 |
| …would target | 2611.50 | 2610.75 |
| Signal status: BIAS-UP | FAQ | |
| NEW! Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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… Sellers shut out, or shut down?
The overnight recovery from 2631.25 ultimately filled the .
The overnight recovery from 2631.25 ultimately filled the gap back to yesterday’s 2647.00 cash session close. Probing its resistance held though the open, and reacted down to 2643.00. Neither bias signal was touched or attacked through the first half-hour. Or through the 10:15 bias-timing window.
The 2651.00 bias-up signal was attacked before the first hour began lapsing. There was still plenty of time before 10:30 for its recovery to invalidate the no-bias. Anxiousness ahead of the (planned) tax reform vote is clearly influential.
The 2651.00 bias-up signal should define the bias environment’s upper-end if tested before the window starts lapsing at 11:30. Probing above it would be “no-bias trending” that requires retracing to the bias signal or lower. No-bias trending in this pattern could test 2654.50.
Meanwhile, back under 2646.00 (being tested now) and 2644.25 would start to signal another downdraft underway, instead. And without the open having formed any anchor in positive territory, a downdraft would have little limitation into the weekend.
The First Trade & Pre-open Tour Recording… Correction: Still correcting.
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…
Thursday’s gap up to 2635.00 ranged sideways up to 2541.00 until finally surging back into rally mode. Extending into the noon hour fulfilled the next major objective at 2657.25 by 1 point. The balance of the session trended back down, retracing the resumed rally’s last surge down to 2541.50. A late bounce retraced the afternoon’s drop by 61.8%, which was also essentially 2651.00 resistance whose recovery would have been bullish. But its resistance held, and the cash session closed at 2647.00. No “unfinished business above” was left outstanding.
Overnight action’s new info…
Reacting down sharply through the close extended to 2640.00. Gradually deteriorating to within 1 tick of this morning’s 2637.00 bias-down target found support to bounce into Europe’s opens. Attacking 2646.00 attracted more selling, which got steep down to 2631.25. Now a 7-point bounce is probing more than 1 point back above 2637.00, but still well into negative territory.
If, then…
Yesterday afternoon’s decline relieved a lot of the high’s overbought condition, but that wasn’t necessarily bullish. Not without being exploited either by closing back above a relevant level, or by gapping up sufficiently. Closing back above 2651.00 wasn’t only not done, it was attempted just short of holding through the close. And failing to complete the last element of a setup tends to resolve as bearishly as it would have been bullish. Which explains the overnight drop as possibly fulfilling a bearish scenario, and not necessarily starting one. This exemplifies yesterday’s Market Wrap conclusion: “The most bullish scenario may be to not delay extending Thursday afternoon’s slide, to finish correcting.” Of course, last-minute wrangling over the tax bill has accompanied each dip and trough. That’s likely to persist into the morning. Gapping down above or below yesterday’s 2635.00 low, and its immediate reaction, will help to anticipate how the market intends to react to today’s tax reform story.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2634.00 would be unlikely to recover the 2637.00 bias-down target in time to avoid renewing the bias-down signal, next targeting 2631.25 and 2628.50. Exiting the open under 2639.25 would be likely at least to trigger the 2642.00 bias-down signal at 10:15.
Phonetic dictation…
good morning and welcome it’s Friday it’s time for Friday’s morning market tour it’s December December one interesting Head and Shoulders pattern here there’s the neckline there’s the left shoulder right shoulder some symmetry Head and Shoulders 61.8% extension from the right neck actually the left shoulder to the right neck take off a tick for the offer gets to a 160 1.8% extension 61.8% 160 1.8% into 61.8% are likely objectives of a head and shoulders are valid Head and Shoulders so it’s possible to 2631 actually 26 3 125 Head and Shoulders pattern and head and shoulders patterns after they’re fulfilled then reverse back in the opposite direction so if this head and shoulders pattern is reversing backup at least before the open if not through the open remember overnight objectives created by patterns or characteristics of price Behavior that are associated with overnight action need to be obvious during if not through the opening 15 minutes of volatility or else they’re done that’s their influence the opening 15 minutes about that’s your influence on the intraday after that these overnight patterns don’t matter much other than to the extent that coincide with other measurements so if in fact extension projection of this head and shoulders if that is in fact valid support then we should be rallying back up into the range of above 2641 would start to suggest that buyers are we taking control what is it would avoid the next lower to 61.8% extension which may be irrelevant 2626 75 which may be irrelevant by the time we get to the open if we’re so far removed from it it would take some pretty quick and I’m not putting a pretty quick sewing Post open selling to get that done and that would not be healthy actually I would be so far removed from the head and shoulders it’s recovery would be less likely more so though it would take this correction all the way down into Wednesday afternoons range or at least to the upper end of it as I said yesterday the next hour or at least the constructive pullback low was in the Gap when there’s a gap that’s not an air pocket just because there’s no trading there air pockets are not the absence of air pockets or overly traded ranges that no longer offer any support and resistance they’ve been so chipped away a bullish pullback would hold within this range like 26 31 25 or 26 28 5026 2875 room for noise around 31:25 Sao opening above 41 for starters would have a good shot at getting away from there from that lower down side extended down side extended downside that has developed by the way because yesterday’s decline in Decline remember I said that the more bullish scenario would not be the end of the decline yesterday but to get more pressure out of the way we’ve had a pretty big couple days if the least and so getting sellers out-of-the-way accelerating sewing pressure into the morningthat could be the most bullish only 200 degrees for 26 3126 2850stent of the pullback that could still be likely to have some Edge on being just to pull back pretty significant off the high but it’s a pretty big rally that’s being corrected any lower a much lower and under 2626 starts it doesn’t preclude there being a corrective or a bounce that is from Troy 626-426-2675 but that bounce itself would likely be only a correction to a bigger to climb into way what could cause that with a story that’s a company the the reaction down yesterday not necessarily off the top it was more of over but extended over everyone situation based on some some apparent holdouts on the tax reform package signaling their acceptance but then India says closed delaying the vote and extending that overnight and then lower this bouncing to Europe’s opens didn’t hold long didn’t hold very well for very long narrative has just deteriorated and so if that if the vote were delayed again today there are some procedural issues or some gimmicks to the package to the text from package that are being overruled that they’re trying to get in trying to replace that are necessary to potentially to a try or presumably to attract certain vote vote is delayed today that’s clearly not going to be received well and there’s a lot more downside than just 26 2675 especially if it’s tested because having to extend down that deeply already suggests that were so far removed from yesterday’s high that it’s no longer just a temporary correction testing 2626 2675 and already bouncing and bad news comes out on the reform package or something else takes down that range remember the next objective 1750 outstanding from from Wednesday and then Tuesday Tuesday’s pull back of thighs at the 2609 75 low that’s not support that’s an attraction support is lower sport gets us down at 2605 so bad news would find a fertile sewing ground to exploit its pretty critical to recovering order greeting any bad news from a position of strength to get out of boat 2641 as early as possible and maintain that and have that evolve into something or like Post open alright I was too deep into the woods if you have any questions feel free to ask statements of support and movement forward on the package but still through the open getting out above 41 is it possible to get too optimistic too early to be sustained it is possible but we’ll take a look at that as that develops if that develops remember yesterday and close is 26 equates to 2647 essentially 2646 75 the future was this late drop down to 42 that extended deeper overnight so it really 2647 lot of resistance up therebut here it is 2647 a lot of resistance up there so there is room for early and not yet two different stagesalright other markets gold extended down this is February gold it’s about a $3 premium to December gold which had supported several Gold Head support 12 8:50 12:30 7:50 so 1280 5012 8350 both broken yesterday both being tested or the lower end being tested is resistance here overnight avoiding covering 1280 58 E350 and the declines momentum remains intact March silver similarly versus December badass 6 or 7 Premium 1670 + 1650 + 1670 + 1650 injectors on the downside 16 let’s make it a dime because I think we’ve got enough of that previously greater premium and I don’t want to start referring to those two as a five to $0.10 premium just too tired of the market for that so 1660 to 1680 number 1680 was attacked within a couple cents stopping optimistically short of filling that Gap that’s what told us be wary of extending down Wednesday well closing lower as room now to bounce back to 1660 even 1670 1668 that really being attempted here but that’s how much room there is for bounce without it even beginning to become bullish this was a very interesting development in between publishing the daily spot yesterday and the bond market close which rather than closing decisively actually recovered to go out and wasn’t broken and it was within a touch but it was still not decisively broken recovery is that being exploited big-time having touch 154 it is required that it be recovered then a close that’s really are a big bicycle here closing above 154 there’s no requirements 53 so long as 154 is recovered through the closed closed today would be as barish as would have been too close under 153 tax or maintain the clothes under 153 yesterday 5680 5744 two days two consecutive sessions closed at or overlapping 5740 which rejected of 3/16 it’s by recovering 312 that is not so bullish anymore about 3:16 will give every benefit of the doubt that this was The Detour down and not a detour up that’s the burden of proof on buyers is 316 otherwise until thenis testing 310 312 resistance can even get that in his cell signal 310 312 resistance and testing just the range let alone closing back under it having tested it but get there would maintain the Berenstain area if not actually reinforce it alright any questions and I will see you there before the open what am I doing remember we do currencies at the end now okay speaking of which Aussie trying to bounce again it did bounce considerably I mean not arbitrarily back to its the upper end of its range before reacting down no more boys than were the other two bounces still needing to fill this Gap outstanding it because the Gap above was filled already lower lows could extend the pound now needs to hold one 3475 to maintain its upside momentum having extended above the 13450 target Liberty breakout confirmation confirmed breakouts confirmation being a second consecutive lower close in this case confirm breakouts require there to be an eventual third lower close there it is already not a great pattern to try bottoming unless it’s already bottoming today so whatever today’s pattern is if it’s not a bottoming pattern that we’re going to be looking for lower Lowe’s next week 1860 cell signal never broken decisively always being overlapped so came back up to 1 1935 cell signal but I think 3500 1930 back in 1860 would resume the decline or take another shot at the cell signal triggering from testing this is still a test this area so until closing and not still overlapping it still potential for recovering this holding this in resuming the rally at least alright good luck today
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