S&P
Mid-day Update… If not for the timing.
Fresh post-open highs are suspicious.
It would seem to be 100% in-line with pre-open expectations. Gapping down through the 1998.50 bias-down target was half the battle. Extending through it or reacting up from it was the other half. And without extending through it, trapped shorts would be squeezed to fuel a recovery.
Bias-down was recovered in time to avoid renewing bias-down. But it was not recovered enough to reverse momentum up. Although sellers aren’t in control, a fresh low at 1993.50 became likely so that its recovery could fuel the recovery.
But no fresh low came before bouncing, first to 2002.75 and then to this morning’s 2004.00 bias-down signal. Now it’s also this afternoon’s bias-up signal.
The bouncing is premature. It’s sponsored by weak hands. It leaves the door open to fresh session lows. Probing above 2004.00 at the bias environment exit could extend anyway.
Look ahead: Economic Calendar – for Wed Mar 16, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar is busy. More so, it contains several influential items. And it’s spread out into the afternoon’s FOMC policy statement. Best of all, this being a quarterly meeting, Fed Chair Yellen will host Q&A — and her utterings have rivaled Draghi’s for influence price action.
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
Housing Starts
8:30 AM ET
Industrial Production
9:15 AM ET
*EIA Petroleum Status Report
10:30 AM ET
**FOMC Policy statement
2:00 PM ET
FOMC Forecasts
2:00 PM ET
**Fed Chair Press Conference
2:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2014.00 | 2004.00 |
| …would target | 2019.50 | 2009.50 |
| Bias-down: under | 2006.00 | 1996.00 |
| …would target | 2000.50 | 1990.50 |
| 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… They missed.
“When you strike at a king, you must kill him.”
Gapping down to and/or through Friday’s low would have begun rejecting its breakout.By the same token — it’s flip-side, actually — coming that close without succeeding would only trap shorts. And squeezing them could succeed where Monday had failed, fueling the rally’s resumption.
The pre-open low was probed by 1 tick down to 1995.50. An interim bounce to 2000.50 was reversed to a fresh low at 1995.00. All that volatility and lower lows, yet the 1998.50 bias-down target was still being overlapped at 10:15.
So, the bias-down signal was not renewed. It also wasn’t rejected in time to signal a recovery yet underway. Meanwhile, fresh lows had room down to 1993.50, albeit likely to recover.
The fresh lows were prevented by a surge attacking 2003.00. Its timing is no more credible than probing fresh lows — either is likely to be retraced. In fact, the surge has reacted down to 2000.00.
Back under 1998.50 would suggest 1993.50 is back-in play. Testing it at this stage (rejecting the interim surge) would be a little less likely to recover. Exiting the bias environment at 11:30 back above its 2004.00 bias-down signal would instead confirm that trapped shorts are fueling a recovery back to 2010.00-2012.00.
Pre-market Tour (recording & summary)
Consolidating around the 1998.50 bias-down target had been probed momentarily down to 1996.50. Now another brief probe lower to 1995.75 has reacted right back up into the consolidation. The open remains capable of gapping down to and/or through Friday’s lows. Succeeding, or not, should trend in that direction through the morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.