S&P
Pre-close view… Buckle in.
Bias environment”s bounce is greeting the bearish WedEX.
Friday afternoon and Monday morning price action should be biased downward. So says the WedEX indicator, which triggered Wednesday, and then clarified matters on Thursday.
All opportunity to invert is gone. The possibility exists, but it is always difficult. Now, not resuming the decline would invalidate the bearish WedEX.
This could get very ugly, and there”s no reason to assume it can recover straightaway Monday.
Look ahead: Economic Calendar – for Mon Aug 24 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday”s pre-open Fed survey is high-profile, but doesn”t have a track record for influencing price action. Not normally. None of them do, except for the Philly Fed. But the Empire State survey did, which might be a function of the hypersensitivity to the upcoming FOMC meeting.
*Chicago Fed National Activity Index
8:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Dennis Lockhart Speaks
3:55 PM ET
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2013.75 | 2010.00 |
| …would target | 2020.25 | 2016.75 |
| Bias-down: under | 2001.25 | 1997.75 |
| …would target | 1995.50 | 1991.75 |
| Signal status: waiting for trigger | 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… Nice try.
Pre-open clears away more of the path down.
After the overnight drop to 2008.75 had been recovered — at least probing above yesterday”s futures close to attack 2029.00 — I noted in the First Trade blog post the risk of fresh lows, despite that seeming counter-intuitive. While anything can happen during expiration, it already had. The overnight drop had started clearing a path down.
A last-minute plunge before the open did probe a fresh low down to 2007.50. That reacted up 10 points to test 2017.00 before 9:45. That was retraced back down to 2009.00 in time to prevent the opening 15 minutes of volatility from trending — just as we discussed during the pre-market Tour, since that would have conflicted with the bearish WedEX.
Those swings formed a Symmetrical Triangle that launched a bigger upleg to its 2022.00 target. Symmetrical Triangles tend initially to break falsely in one direction and then to reverse more substantially in the opposite direction. So, having fulfilled buying pressure, the decline was free to resume.
Which it did by tumbling to new lows at 2003.00. As pointed out during yesterday”s post-market Tour and this morning”s pre-market Wrap, that represents “lower prior highs,” and the last opportunity for a bounce before basically falling off the cliff.
So far, that bounce is testing 2008.00. It hasn”t even touched the overnight low, and it has barely touched the post-open low. That”s not much of a bounce. The decline is free to resume,.. and look out below if it does.
The overnight drop had recovered
The overnight drop had recovered back to its 2029 high before reacting down, now testing and retesting 2016. The opening 15 minutes of volatility can be predictive on expirations, but it need not trigger a signal. We still have a bearish WedEX signal waiting in the wings to influence this afternoon”s price action, assuming that it isn”t inverted, first. And we have a “new Globex trend extreme” that will require being retested at some point intraday. Details and other markets coverage are in the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/shwyrwb
(Note: A technical issue during the recording might have truncated it.)