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Mid-day Update… Tease.
Last week’s lows hold a test, for now.
A bounce had become likely last week, after holding several tests of “lower prior highs” at 2625.00 through relevant timing windows. The bounce was not arbitrary, having neutralized attractions above. So, there is no bullish reason to revisit 2625.00.
And having chipped away so thoroughly at 2625.00, any bounce produced by its retest should be only obligatory. Actually, having chipped away so thoroughly at 2625.00, any bounce should be unlikely. But its test has reacted up to 2637.50.
The 2625.00 test wasn’t arbitrary. It bottomed upon testing this afternoon’s 2622.75 bias-down signal. Triggering bias-up would have been bullish, but only noN-bias triggered by still testing the 2633.75 bias-up signal both at 1:20 and 1:30. Its resistance doesn’t require holding, and its bias-up target doesn’t require being met.
Not yet leveraging this retest of 2625.00 into a new downleg today would undermine sellers greatly. A probe back into Friday’s range would become very likely. Back under 2633.00 would start to signal another attempt underway.
Look ahead: Economic Calendar – for Tue Jan 29, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Any noticeable reaction to Tuesday’s pre-open reports is likely to be duplicated in reaction to the post-open reports. And one of those post-open reports is both high-profile and reliably influential to price action.
International Trade in Goods
8:30 AM ET
Retail Inventories [Advance]
8:30 AM ET
Wholesale Inventories [Advance]
8:30 AM ET
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
2-Yr FRN Note Auction
11:30 AM ET
7-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2635.00 | 2633.75 |
| …would target | 2642.00 | 2640.75 |
| Bias-down: under | 2624.25 | 2622.75 |
| …would target | 2615.50 | 2614.00 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | . | |
| 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… A helpful push.
Pre-open fall over the edge extends post-open.
The overnight drop was on the verge of absorbing its reaction to CAT’s warning by trying to bounce back above 2653.00. But that was retraced back down to and through the earlier 2648.00 low when NVDA added its own warning. Recruiting NDX’s sympathy so near the open triggered a slide to 2637.50.
Post-open action extended down to 2626.50 while 3-minute RSI remained persistently oversold. Meanwhile, 1-minute RSI had begun to diverge positively, and soon 3-minute RSI left oversold territory. A bounce is now probing above 2634.50 with potential up to 2643.75-2645.00.
Holding last week’s repeated tests of “lower prior highs” at 2625.00 had formed the basis for a bounce. Bouncing into Friday’s high wasn’t arbitrary, having neutralized attractions above. There is no bullish reason to be revisiting 2625.00.
2625.00 support is thoroughly chipped away. This morning’s low has attacked 2625.00 to within 6 ticks. It may not be quite so close as to qualify as impatient buying, so beware that the bounce may be shallower than 2643.75-2645.00. Regardless, any bounce should be only a formality before actually touching 2625.00. And touching 2625.00 should offer little if any noticeable support before revealing an air pocket below.
The First Trade & Pre-open Tour Recording… Giving back.
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 last-minute reaction down from the 2641.50 on INTC’s disappointment greeted Globex at 2634.00. The overnight rally greeted Friday’s open with a late surge to 2662.00 which held a post-open dip to 2656.00 support. The rally resumed through 2666.00 and filled the gap back to last Friday’s ~2671.00 close. Its natural resistance held, and held the afternoon’s retest up to 2672.50. That was also the bias-up target, rejected back under the bias-up signal to indicate that buyers were done as the afternoon trended back down to 2657.50. The cash session closed back at the 2662.00 pre-open high, extending through the close back up to 2666.00.
Overnight action’s new info…
Sunday night’s open gapped down just enough to erase the several-point gain above Friday’s cash session close. The balance of the night has trended down gradually, but relentlessly. Friday’s 2650.00 pre-open low was probed by more than 2 points, but its reaction is now tying to recover above 2653.00.
If, then… (notes to accompany the Tour recording)
Friday afternoon gained no traction for the morning’s rally effort. Closing between 2656.00–2666.00 avoided both putting back into play the bear market rally’s next higher objective at 2701.00, or suggesting that buyers were done. Monday’s open can do either by proxy, or at least lay the groundwork, with either setup still requiring a second consecutive confirming close. Opening under 2653.00-2656.00 could start to reverse the trend down, but would otherwise be irrelevant if not extended down intraday. And Friday’s session, which was gapped into, would resolve most bearishly by not filling the open’s gap down under it — or by not delaying a pre-open recovery. Not yet behaving bearishly through the open would suggest that overnight relentless bearish sponsorship was unable to attract intraday reinforcements.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2653.50 would be likely to trigger the 2658.25 bias-down signal at 10:15. Exiting the open under 2645.00 would be likely also to exceed the 2649.75 bias-down target at 10:15 to renew the bias-down signal. Exiting the open above 2622.00 would be unlikely to trigger the 2658.25 bias-down signal at 10:15.