S&P
Mid-day Update… Tripping up.
Recovery’s surprise retracement ends surprisingly, too.
What spikes up, must spike down?
The morning’s bias environment trended up, in-line with the bullish WedEX influence. 
Holding a test of its 2176.00 bias-down signal put into play an offsetting test of its 2185.00 bias-up signal. It became “unfinished business above” that requires being tested.
That didn’t prevent a steep downdraft. The gap back up to Friday’s cash session close produced obligatory resistance. Its likely pullback to 2180.50 was touched as the bias environment came within view of lapsing. Suddenly, priced collapsed back down to 2175.00.
Overbought RSIs require a retest of 2175.00. Meanwhile, back above 2177.75 first would require probing a fresh session high. Not too surprisingly, the upside developed first, touching 2183.50. Surprisingly, it developed by surging more steeply than price had collapsed on the way down.
Don’t blink, you’ll miss it. A reaction down is attacking 2179.00, and any deeper would start to signal new session lows in-play. Avoiding that would maintain recovery potential to fresh highs — if not also back up to last Monday’s highs.
Look ahead: Economic Calendar – for Tue Aug 23, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several Housing sector data are released throughout the week, beginning Tuesday. But other than Wednesday’s Housing data conflicting with Tuesday’s report, high-profile or influential reports are back-loaded to Thursday and Friday.
Redbook
8:55 AM ET
New Home Sales
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2183.50 | 2181.25 |
| …would target | 2189.25 | 2187.00 |
| Bias-down: under | 2176.25 | 2174.00 |
| …would target | 2170.50 | 2168.25 |
| Signal status: NO-BIAS | 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… Delayed instant gratification.
Post-open follow-through is rejected.
The open was greeted by a bounce off of the ~2176.00 overnight low’s retest. But the 2178.00 open reacted down immediately to fresh lows testing 2173.75 support.
Support held. Not without multiple attempts to break lower. And not without the opening 15 minutes still testing Friday afternoon’s ~2176.00 low.
Extending down wasn’t likely. Having gapped down to Friday afternoon’s low, extending down would have formed a “session-long decline.” This setup isn’t often credible when it overlaps a weekend. Also, there’s a confirmed bullish WedEX already in-play. While it doesn’t influence the open, it should selfishly control price action beyond it.
Now another bullish condition is triggered. Having held a test of the 2176.00 bias-down signal through the bias timing window, an offsetting test of the 2185.00 bias-up signal is in-play. That’s effectively a retest of the overnight high, and of the recent range’s upper-end.
And it’s on the way to retesting last Monday’s new highs. Which continues to be the likely resolution, especially so long as this afternoon doesn’t retrace much of this morning’s recovery.
Pre-market Tour (recording & summary)
The overnight probe above Friday’s high has been retraced back down to Friday afternoon’s ~2176.00 low. Friday afternoon’s rally from ~2176.00 had been retraced already overnight, so this extra dip is bordering on overkill. Holding its support or preferably reacting up sharply through the open would maintain the bullish WedEX expectation — if not also confirm it. Dipping any deeper through the open would be difficult to recover, let alone to reverse up.
Details and other markets coverage are discussed in the pre-market Tour recording here.