Posts by Rod David
Look ahead: Economic Calendar – for Fri Dec 16, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday is Quadruple Witch expiration, and the passively bullish WedEX suggests an upward bias into and out of the weekend. But not necessarily Friday morning, which still has a couple of higher-profile econ reports, albeit not with any track record for influencing price action.
Housing Starts
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
*Jeffrey Lacker Speaks
12:30 PM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2271.75 | 2267.00 |
| …would target | 2276.75 | 2272.00 |
| Bias-down: under | 2265.00 | 2260.25 |
| …would target | 2259.00 | 2254.25 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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… Jumping out of quick sand.
Late surge holds test of its target.
A credible recovery would have been obviously underway much sooner, rather than later. 
Fluctuating in a wide 5-point range around the 2251.00 opening print, and yesterday’s 2252.00 cash session close, did not resolve during the opening 15 minutes of volatility.
And, then, suddenly… it did resolve. Up. Sharply and relentlessly, until piercing the 2264.00 bias-up target by 1 tick.
Consolidating since then down to 2258.75 missed two chances at a deeper retracement back to the 2256.75 bias-up signal. Now the 2264.00 bias-up target is being exceeded, despite it having held its test through 10:15 — which is perfectly acceptable since this remains a bias-up environment.
The next higher objective is 2270.00 so long as 2265.50 holds tests as support.. Yesterday’s 2272.50 high had stopped pessimistically short of touching Tuesday’s 2273.00 high, where somewhat overbought RSIs all but require a retest. So does yesterday’s 2243.00 low, eventually.
Pre-market Tour (recording & summary)
BOE’s policy statement had triggered a reaction from the overnight range’s 2257.00 upper-end to probe more than 1 point under its 2151.00 lows. Bouncing 3 points attacked 2253.00 and resolved down to 2247.25. Another bounce attacked 2255.00. None of which assures extending any higher post-open, or bouncing again from another dip. But any recovery should be obvious much sooner rather than later to be credible.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… The hangover.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Wednesday’s FOMC reaction followed a morning dip that had recovered to trigger the afternoon’s 2066.75 bias-up signal. The knee-jerk reaction fulfilled the 2271.75 bias-up target and attacked Tuesday’s 2273.00 high. The next hour was exactly different, plunging 29 points to 2243.00. Even before retracing the final hour’s bounce, sellers had gained traction from exiting the bias environment under the noon hour’s low, and the proxy window trended down to fresh lows.
Overnight action’s new info…
Bouncing back from Wednesday’s late dip settled into a relatively narrow, directionless, choppy range between 2251.00-2257.00. The upper-end is essentially this morning’s bias-up signal. It was being tested again when the BOE policy statement (unchanged) triggered a drop back to the range’s lower-end. And slightly lower, soon piercing under 2250.00.
If, then…
Yesterday’s lows probed twice under Monday’s 2247.00 prior lows, and managed barely not to close below them — a 2 point margin by the cash session close, and 5 points at the futures close. That prior low was itself the product of testing “lower prior highs,” so returning to it suggests that it will — repeat: will — break lower. Eventually. Meanwhile, price remains in the 2273.00 interim high’s orbit, which keeps open the door to retesting it. But that door must be entered almost immediately to avoid oversold RSIs at 2243.00 sucking price down into a multi-session pullback targeting 2215.00 and 2205.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2258.50 would be likely to trigger the 2256.75 bias-up signal at 10:15. Exiting the open under 2253.25 would be unlikely to trigger bias-up. Exiting the open under 2244.25 would be likely to trigger the 2246.75 bias-down signal.