S&P
Mid-day Update… Backed-and-filled.
The morning’s drop is being retraced.
The open fulfilled an Isolation setup that isolated the overnight probe under yesterday’s lows. The setup’s reward is to retrace back to yesterday’s highs, i.e. the origin of the leg containing the isolated probe. 
That’s the likely minimum upside objective. Meanwhile, it’s also likely that the morning be spent backing-and-filling.
Which it was.
Surging to fulfill this morning’s 2793.00 bias-up target held, and reversed down to the 2786.00 bias-up signal. Then lower, to 2781.00. That extra 5 points is similar to no-bias trending, and required being retraced up to 2786.00.
Which it was.
In fact, noon was testing 2788.75 by 1 point. The noon hour’s dip to 2784.50 was recovered back above 2787.00 to signal the rally has resumed. This afternoon’s 2791.50 bias-up signal is now being tested to within 2 ticks.
Being a no-bias environment, the bias-up signal should define the window’s upper-end if tested. The same rule applied this morning, but didn’t prevent a temporary probe. A temporary probe this afternoon is possible, too. And there’s still unfinished above at 2798.00, which is likely to be tested today or tomorrow morning so long as no sell signal gains traction.
Look ahead: Economic Calendar – for Fri Jun 15, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is uncharacteristically busy for an expiration session — quadruple-witch, no less. And that’s not even considering the overnight Bank of Japan monetary announcement. Any reaction to either pre-open report is likely to be duplicated in reaction to the post-open Consumer Sentiment.
Bank of Japan policy statement
overnight
*Quadruple Witching
Empire State Mfg Survey
8:30 AM ET
Industrial Production
9:15 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2786.75 | 2791.50 |
| …would target | 2792.50 | 2797.25 |
| Bias-down: under | 2778.25 | 2783.00 |
| …would target | 2772.75 | 2777.50 |
| Signal status: NO-BIAS | FAQ | |
| Flowcharts: Bias-UP // Bias-DN 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… Fattening it up for tomorrow’s kill.
Rallying back to the highs, while it can.
Maintaining the open above yesterday’s 2779.00-2780.00 low was the minimum requirement to isolate the overnight probe below it. Back above the week’s earlier 2783.00-2784.00 lows was preferable. Most convincing would have been to recover 2788.00-2788.75, too, which would also invert the bearish WedEX.
Sooo close.
The first 15 minutes of volatility fluctuated choppily around 2788.00-2788.75. That was on the way down from the pre-open touch of 2790.75, and the first half-hour’s ultimate dip to 2786.25. That was easily high enough to fulfill the Isolation setup. The likely minimum reward is to retrace the prior high, which is yesterday’s 2796.00 peaks. I would expect 2798.00 to be met, too, neutralizing its “unfinished business above.”
The Isolation setup usually backs-and-fills during the morning, before resuming its recovery. Surging up to fresh highs at 2794.00 is already being retraced back down to 2787.00. There’s room down to the 2786.00 bias-up signal, which could be probed temporarily down to 2783.00-2784.00.
The 2786.00 bias-up signal should hold as support if tested, because this is a bias-up environment. Still overlapping its 2793.00 bias-up target at 10:15 failed to renew the signal, and often holds through the morning.
As for recovering 2788.00-2788.75 to invert yesterday’s bearish WedEX, not quite. That’s not a decisive rejection. As it happens, the setup wasn’t triggered decisively, either. So, we’ll keep the door open for a bearish afternoon tomorrow, especially so long as today’s close is back under 2788.00-2788.75.
The First Trade & Pre-open Tour Recording… Rejection, no. Isolation, maybe.
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…
Optimism was alive and, well, waning ahead of Wednesday’s FOMC events. The morning’s sponsorship triggered bias-up but left its 2798.00 target outstanding. It was attacked it to within 2 points at the morning’s retest of the 2796.00 overnight high, and becomes “unfinished business above.” Drifting lower through the noon hour greeted the FOMC statement at 2792.00. Its reaction down extended to 2781.50, which was retested after bouncing to 2793.50. The cash session close was testing 2779.00-2780.00, and futures settled another 2 ticks lower.
Overnight action’s new info…
Choppy ranging around Wednesday’s close eventually trended down, breaking to fresh lows after midnight. Bottoming soon after Europe’s opens, bouncing since then has retraced back up to yesterday’s 2779.00-2780.00 close, testing natural resistance at unchanged.
If, then…
Isolating the probe under yesterday’s low to the overnight could form an Isolation setup targeting a retest of yesterday’s high. Just holding above yesterday’s 2779.00-2780.00 late lows would be less convincing than to recover Monday-Tuesday’s 2783.00-2784.00 support. Recovering 2788.00-2788.75 through the open would be most convincing, and could also serve by proxy to invert yesterday’s late bearish WedEX. Perhaps that was only a temporary product of defensive posturing ahead of this morning’s ECB policy statement and Draghi Q&A. Otherwise, rallying this morning from a shallower open is still possible, even without exploiting the Isolation opportunity, or inverting the bearish WedEX. Delaying a rally this morning isn’t likely to rally at all, because then the paradigm is probably already shifting to the downside.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2780.50 would be unlikely to trigger the 2773.50 bias-down signal at 10:15. Exiting the open under 2784.00 would be unlikely to trigger the 2786.00 bias-up signal. Exiting the open above 2788.75 would be likely to trigger bias-up.