S&P
Mid-day Update… The first rule of holes.
Target met and held at the low. So far.
This morning’s test of 1989.00 was exceeded only by 3 ticks. Just attacking it to within 3 ticks would have sufficed. Its reaction up through the noon hour reached 1914.00. Such strong hands must be secure in their bullishness.
Or, was that just a knee-jerk reaction to fulfilling so much selling pressure so quickly? The probe above this afternoon’s 1910.75 bias-up signal avoided triggering. And its reaction down has tested 1902.00.
So long as the next lower objective is contained within the first available timing window, new sponsorship is difficult to attract. That increases the potential for a bottom to form. So, breaking under 1918.00 through a relevant timing window put into play 1898.00, and both conditions were triggered and met this morning.
None of which says the drop has bottomed or that the trend has reversed up. But the first rule of getting out of a hole is to stop digging. So, there’s that.
Look ahead: Economic Calendar – for Fri Sep 25, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s GDP has a reliable track record for influencing price action. Any obvious reaction to it should be duplicated by subsequent report. And there are two more coming post-open. The afternoon Fed speaker is a reliable hawk, so if her remarks trigger a negative reaction it is likely anticipated by stronger hands and recoverable.
*Janet Yellen Speaks
Thu 5:00 PM ET
GDP
8:30 AM ET
Corporate Profits
8:30 AM ET
*James Bullard Speaks
9:15 AM ET
*PMI Services Flash
9:45 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*Esther George Speaks – hawk
1:25 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1922.00 | 1910.75 |
| …would target | 1928.50 | 1917.25 |
| Bias-down: under | 1912.25 | 1901.00 |
| …would target | 1907.00 | 1895.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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… 24-hour bug.
Quickly fulfilled objectives can inhibit new sponsorship.
The template we discussed during the pre-market Tour had indicated the 1908.00-1914.00 consolidation was not a bottom. Probing several points under its low was likely. A bigger picture objective had determined already that the next lower objective under 1918.00 was 1899.00. Back above 1916.25 would have signaled a corrective bounce, but 1899.00 was in-play.
The open did blip-up to 1916.25. But only to touch it, expending literally as much buying pressure as was possible to gain without yet gaining traction for the effort. Its reaction down was relentless until touching 1092.50. Reacting up to 1909.75 has resolved down to within 1 tick of 1899.00.
The resumed downleg has formed a Falling Wedge, with room for noise back up to the 1906.00 area. Having plunged into the wedge, its resolution may plunge again. The next lower objective under 1899.00 is 1884.50.
Regardless, containing a low during this morning’s bias environment — recovering this afternoon without probing lower — would likely form a durable bottom. Still probing lower lows this afternoon would suggest a difficult weekend ahead.
Pre-market Tour (recording & summary)
The 19-point slide has extended its 1908.00-1914.00 consolidating beyond 2 hours as the open approaches. The template suggests resuming the decline without delay, targeting 1899.00. There is potential for bouncing first, but in that case probably only to test 1920.50 before reversing to fresh lows. Regardless of how a probe to fresh lows were to begin, it’s ultimate resolution is unknown without two pieces of information we’ll get this morning. Bouncing so much as to avoid fresh lows altogether would not be a credible bottom.
Details and other markets coverage are discussed in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/shwcjvw