S&P
Mid-day Update… Terrible twos.
Price keeps returning to relevant support.
This morning’ s 1922.00 bias-down signal held the open’s bounce, then it held the recovery from fresh lows. Probing above it came after triggering bias-down.
Probes above 1922.00 were retraced as the bias-down signal defined the bias-down environment’s upper-end. Those probes got to 1924.00, 1926.00 and almost 1929.00. Each probe was retraced to 1922.00 — and lower during the noon hour, attacking 1918.00.
All while still ranging around 1922.00.
Attacking this morning’s lows would likely extend back into last week’s range under 1909.00. The afternoon’s no-bias environment could otherwise bounce to test its 1931.50 bias-up signal without trending.
Look ahead: Economic Calendar – for Tue Feb 2, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s econ calendar is slow until the afternoon’s Fed speaker. Things start getting busy as Friday’s Employment Situation report nears.
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
*Esther George Speaks
1:00 PM ET
.
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1938.25 | 1931.50 |
| …would target | 1943.75 | 1937.00 |
| Bias-down: under | 1924.25 | 1917.50 |
| …would target | 1918.25 | 1911.50 |
| 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… The old college tries.
Post-open probes under support recover.
The overnight drop had attacked 1913.00 to within 3 ticks. Bouncing into and out of the open tested the 1922.00 bias-down signal as resistance.
So, the gap down had avoided 1913.00. The opening 15 minutes of volatility had held two tests of Friday afternoon’s bias environment low. A durable reversal down wasn’t credible.
But fresh lows remained possible if buyers weren’t regaining control. And buyers weren’t regaining control.
Several econ reports helped that bounce resolve down to fresh lows testing 1913.00. Another bounce tested the post-open high and the 1922.00 bias-down signal, which held again.
Triggering late bias-down, whose target has been met, only requires the morning’s upper-end to be defined by the 1922.00 bias-down signal. Meanwhile, attacking or probing the lows is possible down to 1914.00 or 1911.50, but not required.
Pre-market Tour (recording & summary)
The overnight pullback extended lower to attack 1913.00. Gapping under it would invalidate Friday’s close above 1924.00. The close already was suspicious, but it’s now official that higher targets are not in-play. Now the recovery is on defense.
None of which confirms the trend is reversing back down.
Exiting the weekend with extreme sentiment is often a sentiment extreme. Trending relentlessly overnight is often reversed at the open. And testing “lower prior highs” as support within last week’s trading range can launch another rally effort.
Extending down anyway through the open may be irrecoverable. But we’ll monitor for recovery potential if new sellers aren’t being attracted post-open.
Details and other markets coverage are discussed in the pre-market Tour recording here.