Posts by Rod David
Mid-day Update… The three-day weekend effect.
A seasonal timing window may be rushing to fulfill upside.
The open’s rally peaked at 2735.50, but none of my measurements justified that being the rally’s end. Room for a pullback down to 2730.00 was fully exploited before price began firming. Firming, and then surging to 2742.00 before the bias environment began lapsing.
Flat-to-higher ranging through the noon hour attacked 2745.00, fulfilling the rally’s next higher target at 2743.50. Reactions down held 2739.00, and now the afternoon’s bias-up has triggered late. The rally’s next higher target at 2751.00 — which is also this afternoon’s bias-up target — is in-play.
RSIs are now overbought at the current high attacking 2747.00 to require that any immediate dip be recovered. Back under 2742.00 could be difficult to recover.
Wednesday is the wek’s most liquid, and the most predictive Wednesdays precede expirations and 3-day weekends. Counter-trend sponsorship ahead of 3-day weekends is difficult to generate after Wednesday. Fulfilling the 2751.00 target without putting into play a higher objective could be difficult to reverse back down.
Look ahead: Economic Calendar – for Wed Feb 13, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several Fed speakers appear sporadically throughout Wednesday. Only one high-profile econ report is scheduled. Its reaction should duplicate any reaction to either the pre-open report or Fed speaker.
MBA Mortgage Applications
7:00 AM ET
Raphael Bostic Speaks
7:15 AM ET
*CPI
8:30 AM ET
*Loretta Mester Speaks
8:50 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Patrick Harker Speaks
12:00 PM ET
Treasury Budget
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2744.25 | 2743.50 |
| …would target | 2751.75 | 2751.00 |
| Bias-down: under | 2735.50 | 2735.00 |
| …would target | 2728.25 | 2727.75 |
| Signal status: LATE BIAS-UP | . | |
| 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… And higher.
Overnight rally extends intraday.
The overnight rally peaked upon testing the gap back up to last Wednesday’s 2730.00-2731.00 close. This doesn’t qualify as filling the gap, which must be done intraday. But a pullback down to 2726.00 surged at the open, to and through overnight highs up to 2733.00. Gradually eking even higher has touched 2735.50.
2735.50 isn’t an impressive calculable target. As resistance, 1-minute RSI diverged negatively and 3-minute RSI eventually left persistently overbought territory. Price has reacted down to 2732.00. All of which seems to be noise, since 2735.50 satisfies very little buying pressure.
2735.50 also stops pessimistically short of touching last week’s 2737.00-2737.75 highs. That’s potentially bullish from a contrarian perspective. Reacting down under 2732.00 could test 2730.00 and still be likely to resume the rally. Unless something more dramatic were to develop below, the rally could extend to 2743.50 or 2751.00.
The First Trade & Pre-open Tour Recording… Overnight buyers, 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 gap up to 2714.50 was well off of Sunday night’s 2721.50 high, but still well above the 2700.50 overnight low. Dipping through the opening 15 minutes of volatility settled into a choppy range largely contained between 2705.50-2712.75, and ranging around 2708.00-2709.00, which ultimately contained the close.
Overnight action’s new info…
Already firming soon after the Globex open, news of a budget deal seemed to be drive price sharply higher. Sunday night’s highs were probed by 3 points up to 2724.25 before midnight. Ranging flat-to-lower found support at what is this morning’s 2720.50 bias-up target. The consolidation finally resolved by surging into Europe’s opens, attacking 2727.00. Another correction has recovered to now probe fresh highs probing 2728.00.
If, then… (notes to accompany the Tour recording)
Overnight patterns don’t necessarily guide intraday activity. One example is Sunday night’s highs, which had stopped pessimistically short of touching the consolidation from last Tue-Wed, and its “higher prior lows” at 2723.00-2727.00. Contrarianism would have made that bullish, if the attack had developed intraday. Another example is Monday night’s actual test of those same higher prior lows. Their test intraday would be likely to react down, but gapping up above resistance often extends through it intraday. The question is how today’s opening 15 minutes of volatility negotiates the higher prior lows — and possibly also the gap back to Wednesday’s 2730.00-2731.00 close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2722.75 would be likely also to exceed the 2720.50 bias-up target at 10:15 to renew the bias-up signal.