S&P
Mid-day Update… BIAS-DOWN, BIAS-DOWN TARGET MET.
Greeting FOMC from a pullback to support.
The post-open dip to 2947.00 was recovered before noon back up to the morning’s 2955.75 bias-up target. Its reaction trended down to fresh lows through the noon hour and tested this afternoon’s 2944.50 bias-down target by 1 point. Its reaction bounced up to test this afternoon’s 2950.50 bias-down signal by 3 ticks, which held its test.
This is a bias-down environment, and its bias-down target was already met. Its retest is in-play, but won’t become “unfinished business” if left outstanding.
Retesting the bias-down target is less likely with the FOMC events just minutes away and beginning during the bias environment. Greeting FOMC from beyond either end of the 2946.25-2949.50 range would be likely to react in that direction. In between is an unknown “no man’s land”.
Volatility tends to be excessive during FOMC policy statements and Fed Chair Q&As. Be sure to consider that greater degree of unpredictability in position-sizing and execution decisions.
Look ahead: Economic Calendar – for Thu May 2, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s pre-open Claims is high-profile, but usually not influential to price action, although that might be different ahead of Friday’s payrolls. Any noticeable reaction is likely to be duplicated in reaction to the post-open report.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Factory Orders
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2956.00 | 2957.75 |
| …would target | 2962.25 | 2964.00 |
| Bias-down: under | 2948.50 | 2950.50 |
| …would target | 2942.50 | 2944.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| 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… BIAS-UP INVALIDATED.
Pullback through the open still recovers bias-up signal, then doesn’t.
Yesterday’s last-minute surge through 2947.00 into the post-close fresh high had extended to new highs at 2961.25 before midnight. The trend since then has been down. Down into Europe’s opens, down into the open and then down through the first half-hour to touch 2947.00.
Still, the 2950.50 bias-up signal was recovered in time to trigger cleanly. Its subsequent test as support did NOT hold at 10:30, invalidating the bias-up. The 2955.75 bias-up target is NOT in-play, although the overnight high’s “new Globex trend extreme” might also be an attraction.
The invalidation isn’t surprising since upside objectives are fighting the headwinds of this afternoon’s impending FOMC events. Triggering bias-up first, and THEN being invalidated does reflect excessive optimism. Regardless, back above 2953.25 would be helpful to the upside. Otherwise, a deeper pullback to 2945.00 is likely.
The First Trade & Pre-open Tour Recording… They’re baaack (up).
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…
The recovery from an overnight dip was already retracing into Tuesday’s 2941.50 open. The retracement extended to test overnight lows down to 2935.00, collapsing from there to 2926.00. Simultaneously oversold RSIs helped to launch a reaction that entered the noon hour back above the earlier 2935.00 low. Still firming into the afternoon bias environment didn’t firm enough in time to trigger the 2941.50 bias-up signal. That didn’t prevent no-bias trending from probing above it anyway, or from hovering at the afternoon’s 2947.00 bias-up target. Anxiousness ahead of AAPL’s post-close earnings probably paralyzed price action there. A blip-up at the close touched 2950.50.
Overnight action’s new info…
Surging to 2956.50 in reaction to AAPL’s earnings reaction (AMD did well, too) neutralized Monday afternoon’s unfinished business at 2954.25. Consolidating into early Globex was recovered to extend the rally to 2961.25 before midnight. Complexity of the upleg qualifies its high as a “new Globex trend extreme” requiring intraday retest, often the same day. Price action since then drifted lower several points, eventually steepening to test this morning’s 2955.75 bias-up target by 3 ticks, and the upper-end of yesterday’s post-close surge.
If, then… (notes to accompany the Tour recording)
All price action above Friday’s 2951.50 high has developed after yesterday’s close. It’s impressive enough that the next session’s 2926.00 low was recovered intraday at least to within proximity of the high. But already trending above it and by so much suggests pessimism is in hiding, but that a few pessimists have been found and shot. This can prove bearish from a contrarian perspective, although not too pleasant for pessimists in the interim, in more ways than one. But it is exclusively an overnight rally, essentially, which can become an intraday decline if the open doesn’t quickly attract intraday reinforcements. That’s without even considering the weighty afternoon events, or any negative pre-open earnings surprises. Trending beyond an established range is already difficult ahead of an afternoon’s FOMC events, or difficult to maintain. Extending last night’s rally this morning anyway would next target 2969.00, and be difficult to defend. Backing-and-filling ahead of the report could become a much deeper reversal if the 2950.50 bias-up signal doesn’t trigger.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2957.25 would be likely to exceed the 2955.75 bias-up signal at 10:15 to renew the bias-up signal. Exiting the open above 2953.75 would be likely at least to trigger the 2950.50 bias-up signal. Exiting the open under 2947.25 would be unlikely to trigger bias-up.