Posts by Rod David
Mid-day Update… Neither here nor there.
Holding support and recovering resistance are two very different things.
CORRECTION: This morning I inadvertently referred to yesterday afternoon’s bias parameters in the Market Tour and Post-open Review. The cause for that has been corrected. Sorry for the confusion!
The test of 2566.75-2568.50 was aggressive, thorough, and brief. And it was almost rejected. It was also almost not rejected. Still overlapping 2570.00 at both 10:15 and 10:30 
neither held it nor rejected it. That’s okay — a higher signal can trigger by proxy.
Extending sharply higher after 10:30 tested 2578.00. Being this morning’s bias-down signal, during a bias-down environment, 2578.00 defined the window’s upper-end. Recovering it into the noon hour would have confirmed by proxy that 2570.00 had held recovered earlier. But 2578.00 was being attacked at noon. That’s okay — another signal can trigger a recovery.
2578.00 also defined the noon hour’s upper-end. That could have caused the noon hour’s exit to tumble and attack 2570.00. But it was likely a knee-jerk reaction to headlines of a bomb threat in Paris. Anyway, the afternoon’s 2573.25 bias-down signal was tested at 1:20 and 1:30 to trigger noN-bias. That’s okay — but not for long.
Hopefully, the Paris threat will pass without incident. If so, then a recovery would have no excuse to further delay rallying back to yesterday’s 2586.00 high, if not also back to last week’s 2593.50 high and higher. Back above 2576.00 (now being tested) would start to signal a recovery underway. Back under 2572.25 would start to signal a bigger downleg underway. That’s okay — there’s a lot of buyers waiting at 2510.00.
Look ahead: Economic Calendar – for Wed Nov 15, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s pre-open CPI is reliable for influencing price action. The post-open reports are high-profile, but otherwise not influential. Although, they’ll be likely to duplicate any noticeable reaction to CPI.
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
Retail Sales
8:30 AM ET
Empire State Mfg Survey
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
Treasury International Capital
4:00 PM ET
*Eric Rosengren Speaks
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2582.00 | 2580.25 |
| …would target | 2588.00 | 2586.50 |
| Bias-down: under | 2574.75 | 2573.25 |
| …would target | 2570.25 | 2568.50 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| 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… Digging deeper for buyers.
The lows that yesterday left outstanding.
Yesterday’s opening rally would have been more substantial had it originated from a slightly deeper opening dip. And had that dip recovered a relevant level through the open.
Its shallow, premature origins didn’t prevent surging. But the surge was limited. And it was retraced entirely to touch yesterday morning’s open 2572.50 before today’s open.
This morning’s open tried to hold. Its wide 5-point 2571.00-2576.00 range ultimately resolved down, sharply. An air pocket opened down to 2564.25, 3-4 points under the downside potential that yesterday’s premature rally had avoided. But what about its recovery.
Recovering 2570.00 into the bias environment would have signaled sellers were done. But 2570.00 was still being overlapped at 10:15, and also at 10:30. That’s not enough, and it’s too late to do more. Too late, and too early. Exiting the bias environment at 11:30-noon above its 2578.00 bias-down signal would serve by proxy as if 2570.00 had been recovered earlier.
Meanwhile, the open’s low could be retested. Back under 2568.00 would trigger it, which is being attacked now. Recovering from the low’s retest could still recover. Recovering from the low’s retest is less likely, and very vulnerable simply to extending the decline.
The First Trade & Pre-open Tour Recording… Trying, trying again.
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…
Monday’s open was already recovering from a 10-point overnight drop that had attacked 2570.00. The drop was actually down 14 points from Sunday night’s initial rally attempt. All of which was eventually retraced, and then probed momentarily by 1 point up to 2585.50. The open’s rally had retraced most of the overnight drop before slowing its pace, probably because the initial drop stopped short of its potential to 2566.75-2568.50. Which is why we anticipated that the afternoon’s steeper slope would fail, and from where, to end the day probing back under the open’s 2582.25 highs. Overbought RSIs were left outstanding at the high.
Overnight action’s new info…
Reversing down from Monday’s late surge had dipped back under the open’s 2582.25 highs. The dip extended through the close, and through midnight, to eventually attack 2577.00 within 1 tick. Surging into and out of Europe’s opens touched 2582.52 before reversing back down to again attack 2577.00.
If, then…
Monday afternoon’s windows did gain enough traction to suggest that an overnight drop would recover. the question is from where. The overnight test of 2577.00 is already sufficient, assuming that this morning’s open is exited back above yesterday’s opening highs — but it has gotten a little late to still be testing overnight lows if a recovery is so close. Otherwise, holding a test of 2574.00 could be the last opportunity to avoid 2566.75-2568.50. And that could be the last opportunity to squeeze in a retest of last week’s highs before a deeper pullback into the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2583.00 would be unlikely to trigger the 2585.00 bias-up signal at 10:15. Exiting the open above 2580.25 would be unlikely to trigger the 2578.75 bias-down signal. Exiting the open under 2575.00 would be likely to trigger bias-down.