S&P
Mid-day Update… They’re still waiting.
Stuck in this morning’s defensive range.
The next lower objective for this morning’s drop was 2921.25, and it was tested as the first hour ended. Its bounce was rejected by a 6-point plunge to test 2918.00 as rumors emerged about a possible DOJ resignation/firing.
Perhaps the first bounce was headed higher if not for the knee-jerk reaction down. That reaction down recovered above 2919.00 to avoid exiting the bias environment with something more substantial in-play. A second bounce got to 2926.00 as the bias environment lapsed.
But price action has only settled in, and settled down, fluctuating between 2919.00-2923.00. This afternoon’s 2921.00 bias-down signal just held to trigger noN-bias. Back above 2924.25 would start to signal a bigger bounce underway, but it’s not required. And waiting for more news or closure makes any trending difficult.
Look ahead: Economic Calendar – for Tue Sep 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Home price trends and home construction building activity come back into view as a new round of reports begin Tuesday. Their filter is recent glimpses of possible peaking. Meanwhile, any reaction to the pre-open reports is likely to be duplicated in reaction to a post-open report.
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
FHFA House Price Index
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2923.75 | 2928.75 |
| …would target | 2931.00 | 2936.00 |
| Bias-down: under | 2916.00 | 2921.00 |
| …would target | 2910.50 | 2915.50 |
| Signal status: STILL TESTING BIAS-DOWN SIGNAL | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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… Waiting for another shoe.
Sunday night’s range holds through the open.
The pre-open recovery back up to the 2930.00 open didn’t break higher. That prevented an Isolation setup from forming. A post-open ally could have developed anyway, but the pre-open reaction only extended back down to the 2923.25 low.
Reactions up to 2929.00 still overlapped the 2927.00 bias-down target at 10:15 to avoid renewing the bias-down signal. But this is still a bias-down environment. And extending down anyway would next target 2921.25 (not being tested by 2 ticks).
Exiting the bias environment under 2919.00 would start to signal something more substantial underway than this morning’s drop. Perhaps the defensive posturing will continue until the market can become comfortable that China doesn’t have additional retaliatory strikes, other than what it announced already last week. Back above 2927.00 would start to signal a bottom is forming.
The First Trade & Pre-open Tour Recording… The discounting is in.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Friday afternoon’s bullish WedEX influence wasn’t. A “new Globex trend extreme” had formed overnight, which was neutralized by piercing it 6 ticks up to 2947.00 during the pre-open minutes. Although that had avoided the earlier threat of a Globex-Flip setup under 2938.00, the morning dipped back down to 2938.50. Other than gapping up, bouncing to 2944.00 was the only bullish behavior. But that reversed down just when the WedEX’s influence should have pushed price higher. Quite the opposite, the afternoon resolved down to its 2932.50 bias-down target through the expiration close.
Overnight action’s new info…
Saturday we discussed whether Friday’s post-open decline was defensive posturing ahead of Monday’s new tariffs on China. Even if already fully discounted, a knee-jerk reaction to the news would be normal. So, Sunday night’s gap down to 2929.50 wasn’t surprising or unusual. A pattern soon formed that targeted 2921.25-2923.00, and its upper-end was touched. Bouncing back into the range held up through Europe’s opens, inspiring confidence for retesting the open’s gap up to 2930.00. That has formed an Ascending Triangle.
If, then… (notes to accompany the Tour recording)
Lower price doesn’t necessarily equate to traction. We applied that to Friday afternoon’s shallow relentless drop back to 2836.00 support — lower lows were probed too late to be relevant. We’re now applying it to last night’s gap down. Unless selling pressure exits a window under a relevant level to gain traction, it is actually pent-up buying pressure. We’re not relying on the WedEX to be influential this morning if it wasn’t on Friday afternoon, but it should be very influential if it does compensate for the delay. Meanwhile, while the open’s gap disqualifies a Globex-flip setup, probing Friday’s lows overnight does create potential for an Isolation setup. All of which is probably premised on China tariffs being discounted. Speaking of whom, we haven’t heard from China, and retaliatory tariffs would deserve at least another knee-jerk reaction down to 2919.25 before suggesting anything more substantial.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2936.00 would be unlikely to trigger the 2932.00 bias-down signal at 10:15. Exiting the open under 2927.00 would be likely to trigger bias-down.