Posts by Rod David
Mid-day Update… Digging deep.
Did they strike buyers?
This morning’s opening action warned early that it could become a dry cleaners morning. And when neither bias signal had been touched by 10:15, the balance of the morning edged its way back down to the open’s 2291.75 low.
2291.75 was also the overnight low, which held through the open to suggest that sellers weren’t going to retake control. That didn’t prevent piercing slightly lower during the noon hour, and then dipping to 2289.50.
But this afternoon’s 2290.75 bias-down signal did not trigger. It also didn’t hold. It was still being tested at both 1:20 and 1:30 to trigger noN-bias. Sellers still haven’t taken control — digging deeper and deeper has been more an effort to attract strong-handed buyers.
Back above 2293.00 (being tested now) would suggest that the drop had dug deep enough. Rallying back to overnight highs would be likely. Otherwise, digging any deeper for sellers could need to dig steeper, too.
Look ahead: Economic Calendar – for Fri Jan 27, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Durable Goods report has a track record for influencing price action. And its pre-open reaction is likely to be duplicated when the post-open Consumer Sentiment is released.
*Durable Goods Orders
8:30 AM ET
GDP
8:30 AM ET
*Consumer Sentiment
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 | 2301.75 | 2297.25 |
| …would target | 2306.75 | 2302.50 |
| Bias-down: under | 2295.00 | 2290.75 |
| …would target | 2288.50 | 2284.00 |
| 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… Second thoughts.
Overnight rally is retraced entirely.
The “new Globex trend extreme” at 2299.50 should be retested at some point intraday. F\Breaking back under the 2291.75 overnight low through the open would have made the high’s retest unlikely today. The inverse is not true. So, holding the overnight low’s test through the open does not require retesting 2299.50 today. But it does keep the door open.
Trading around unchanged isn’t preventing the overnight high’s retest. A bigger impediment is that negative territory was probed so shallowly. More precisely, that it was probed so shallowly without already reacting up. A deeper dip holding the 2289.25 bias-down signal would have put into play an offsetting test of the 2297.50 bias-up signal. Instead, the rubber band wasn’t stretched tightly enough to snap back up forcefully.
Reacting up is nonetheless printing fresh post-open highs up to 2296.50. But that’s still overlapping the 2296.00 open’s peak. And RSIs aren’t improving, or even attacking overbought. While a new downleg this morning is unlikely, suddenly rallying isn’t much more likely.
The First Trade & Pre-open Tour Recording…
Proper context can start the day with a solid win and make all the difference.
NEW 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 open gapped up 6 points above Tuesday’s high to 2286.50. Trending up through the day nearly touched 2295.25 just before the close. But that was too late to gain traction. Only the bias environment exit was above its prior timing window’s high, and the final hour’s entry didn’t confirm. Even closing the cash session above the bias environment’s 2294.25 high was too late. But the session still qualified as a breakout, putting into play the next higher objective at 2227.00.
Overnight action’s new info…
Wednesday’s last-minute reaction down wasn’t deep, and it didn’t extend much deeper before firming from a test of 2292.00. Firming became surging, eventually piercing 2299.00. Consolidating the overnight highs until Europe’s opens has drifted back under yesterday’s highs to unchanged testing 2294.00 as support. Regardless, there was complexity while probing fresh highs, which creates a “new Globex trend extreme” that requires intraday retest (not necessarily today).
If, then…
Trending back down this morning is possible. A relatively shallow dip would be likelier than a deep dip, if any dip at all. But this rally’s ongoing pattern is likely to meet its next higher objective aggressively, and also to reject it aggressively. That could have followed Tuesday’s fulfillment of what was then the next higher objective at 2278.25 and a new high close. It didn’t, so now the aggressive rejection must wait for the next higher objective of 2327.00. That might have been avoided by not confirming yesterday’s breakout today, but the character of yesterday’s pattern already suggests it won’t be rejected abruptly. Reversing down from a retest of last night’s “new Globex trend extreme” is possible, as is already opening under the overnight low to avoid retesting last night’s highs today. But holding up through the open would suggest the rally will extend into next week.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2298.75 would be likely to trigger the 2297.50 bias-up signal at 10:15. Exiting the open under 2291.50 would be unlikely to trigger bias-up.