Posts by Rod David
Look ahead: Economic Calendar – for Tue Dec 13, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s most influential economic event isn’t a report, but the 30-year auction, which greets a deeply-depressed market. None of the session’s actual reports is either high-profile or has a reliable track record of influencing price action.
NFIB Small Business Optimism Index
6:00 AM ET
Import and Export Prices
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2260.00 | 2254.50 |
| …would target | 2265.75 | 2260.50 |
| Bias-down: under | 2252.50 | 2247.25 |
| …would target | 2247.00 | 2241.50 |
| 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… Tried, tried again.
Post-open bounce shallower than overnight surge.
We got an extra probe above Friday’s highs, but nothing to invalidate that a multi-session downleg 
may be launching today.
Opening at this morning’s 2253.25 bias-down signal fluctuated there through the opening 15 minutes of volatility. That created congestion which was likely to be retested, whether only temporarily or on the way to reversing in the opposite direction.
Although probing above Friday’s highs had been isolated to the overnight, price broke higher anyway. It retraced 61.8% of the overnight retracement back up to 2259.00. Reacting down sharply again isolated the post-open break higher to between the 9:45 opening and the 10:15 bias timing window.
Reacting down sharply tested the open’s congestion, but only attacked the 2253.25 bias-down signal to within 1 tick. Breaking it 1 minute later was too late to invoke the grace period. Regardless, probing fresh lows through 10:30 has invalidated the no-bias.
Not a late bias-down, not a noB-bias, but invalidated bias. The parameters can still influence price if tested, but their tests aren’t required, and their tests aren’t required to resolve in any specific way. Exiting the bias environment above Friday’s high would target new highs.
Pre-market Tour (recording & summary)
The last overnight dip’s recovery has been contained within Friday’s range around its 2254.25 close. Not repeating the probe above it would isolate the fresh highs to the overnight, and launch a reversal down this morning under 2151.25. But back above 2256.40 would help this morning to at least temporarily probe back toward the overnight high.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… *Pop* goes the weekend.
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…
A third consecutive narrowly ranging overnight Globex session was followed by a third consecutive intraday rally that ended above the morning’s highs. The morning held a test of the next higher upside objective at 2247.25 and the afternoon held tests of its higher objective at 2252.50. Intraday patterns targeting 2254.25 defined the cash session highs No traction was gained, but a new trend extreme close on Fridays requires at least one eventual new trend high close.
Overnight action’s new info…
Agreement among non-OPEC producers to limit production triggered a 10-point surge at Sunday night’s open, attacking 2265.00 just 15 minutes later. It was steadily retraced during the next 5 hours, despite its catalyst Crude Oil maintaining its gap up. Except for that round-trip, the balance of price action has resembled the three prior consecutive overnight Globex sessions — choppily fluctuating around unchanged, most recently touching 2151.75. Currently a bounce has recovered again to unchanged at 2254.25.
If, then…
This weekend’s Saturday Review discussed reasons why a multi-session pullback would not be inappropriate to begin today, regardless of whether fresh highs were probed first. I can update that now to say that it remains as true, despite last night’s probe higher. But now that fresh highs have been probed, reversing down intraday would be likelier if they’re isolated to the overnight. Despite its substantial 10-point girth, last night’s opening surge had no complexity that would otherwise have required its intraday retest. It’s interesting that Sunday night’s open didn’t gap up before surging, almost grudgingly moving to discount Crude Oil’s reaction to this weekend’s news, which had gapped up. Similarly, the open’s surge was retraced while Crude Oil continues to hover at its gap up levels. If a multi-session pullback were going to begin today anyway, then compensating for the artificial overnight surge may exacerbate its depth.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2251.50 would be likely to trigger the 2253.25 bias-down signal at 10:15. Exiting the open above 2256.00 would be unlikely to trigger bias-down.