S&P
Mid-day Update… Back to business?
BONUS: SCROLL DOWN FOR NEW INSTRUCTIONAL VIDEOS.
The open’s attack on 2640.00 had renewed the bias-up signal. But it had also held the three pre-open highs. Dipping back down to their 2626.00-2627.00 interim lows didn’t hold, 
and the bias environment extended down sharply to 2602.00.
2602.00 was the peak of Friday’s last-minute bounce. Gaps back down to the 2688.00 and 2697.00 closes weren’t filled before bouncing through the noon hour. That’s optimism. And that optimism was well-rewarded by fulfilling the afternoon’s 2633.50 bias-up target.
This afternoon is a bias-up environment, so its 2626.00 bias-up signal should define the window’s lower-end if tested. It’s trying to contain a test now (see nearby chart). This morning’s bias-up signal probed 7-8 points under its bias-up signal before recovering. Repeating that behavior is possible.
The balance of the session isn’t required to trend at all. But it’s free to probe the bias-up target at any time, and to test Friday afternoon’s ~2650.00 high. Similarly, oversold RSIs at the morning’s low require a retest. Combined with it being an optimistic low, it’s likely to be retested sooner rather than later.
BONUS: NEW INSTRUCTIONAL VIDEOS
This morning’s action was rich with examples of reaction limit tests (bounce limit, pullback limit). That included a noon hour re-entry setup that I describe whenever it appears. So, I created two instructional videos for them, only several minutes long each (not including Coming Attractions, Turn-off-your-ringer PSA, and credits):
Look ahead: Economic Calendar – for Tue Mar 27, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s econ calendar is busy, but only one item is both high-profile and reliable for influencing price action — the post-open Consumer Confidence. It would likely duplicate any noticeable reaction to either pre-open report. The late-morning Fed speaker could influence price action, too.
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
*Raphael Bostic Speaks
11:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill 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 | 2625.25 | 2626.00 |
| …would target | 2633.00 | 2633.50 |
| Bias-down: under | 2609.25 | 2609.75 |
| …would target | 2599.50 | 2600.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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… Holding up, but not heading up.
Choppy sideways ranging trying to break lower.
The overnight rally first tested 2634.00 3-1/2 hours before the open. Its reaction down and two slightly higher highs were interrupted by dips to 2626.00-2627.00. 
One more fresh high through the open attacked 2640.00, and also dipped to 2626.00-2627.00.
Then deeper.
The last reaction down has extended to test 2620.00. That was the first consolidation of Friday afternoon’s break under its morning lows. And this is the first probe under 2626.00-2627.00 in more than 4-1/2 hours. It is a big decision point:
Maintaining this morning’s open back above Friday morning’s lows had formed a sort of Isolation setup. Maintaining this break back under those lows would invalidate the setup, and its recovery attempt. But recovering those lows through the bias environment exit would maintain the Isolation setup, and potential for fresh highs today.
The First Trade & Pre-open Tour Recording… Refueling?
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…
Thursday night’s 2626.00 lows had been probed momentarily by 9 points. A pre-open bounce had tested 2658.00. The open’s potential Isolation setup failed Rather than establish a range, the wide swings released their energy at Friday’s 2650.00 open through its 2588.00 cash session close. Futures bounced 9-11 points into the weekend. Nearly two weeks of decline had finally returned to the original downleg’s 2694.75 intraday low, which is still the Pivotal Low — i.e. the low prior to the actual low.
Overnight action’s new info…
The word over the weekend was that progress is being made in negotiations on trade with China. Nothing definitive, but it was enough for one of the worst intraday drops to re-open only slightly down at 2595.00. At first, the overnight crowd was tentative. Dipping a couple of points was recovered to a fresh post-open high. It reacted down to a fresh post-open low at 2591.00, just 5 points from from Friday’s low, and certain oblivion below it. But the next hour eked its way back up to post-open highs. And continued. Extending higher overnight to 2636.00 has been ranging back down to Friday morning’s — and Thursday night’s — 2626.00-2627.00 lows as support.
If, then…
This is not a durable recovery. It might be the beginning of a bottoming pattern, which I doubt, but that would require holding a test of the gap back down to Friday’s close. And double-digit overnight rally must produce another double-digit leg to even attack Friday’s last relative highs. Still, the overnight reversal could extend intraday if its recovery above 2626.00-2627.00 is maintained. Similar to an Isolation setup, the interim price action can fuel a short-squeeze. Alternatively, relentless overnight trending often reverses its trend at the open. Regardless, the opening 15 minutes of volatility tends to establish either of these two setups, so we should know today’s direction early.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2627.00 would be likely also to exceed the 2624.50 bias-up target through 10:15 to renew the bias-up signal.