Posts by Rod David
Look ahead: Economic Calendar – for Fri Dec 2, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open Employment Situation report is reliable for triggering a price reaction, whether or not it extends into the open, or is reversed. No other econ reports are scheduled, but the Fed speakers will have a higher-profile due to the morning’s news.
*Employment Situation
8:30 AM ET
Lael Brainard Speaks
8:45 AM ET
*Daniel Tarullo 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 | 2203.25 | 2202.25 |
| …would target | 2208.50 | 2207.75 |
| Bias-down: under | 2193.75 | 2193.00 |
| …would target | 2188.50 | 2187.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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… Not going gently.
Choppy open still gains downside traction.
The pre-open bounce up to 2203.00 held its late resistance from yesterday afternoon. Post-open action immediately slid to test the 2197.50 bias-down signal, then bounced again. Another drop came to within 1 tick of the 2194.25 overnight low, then bounced again. One more bounce managed to invoke the grace period, which resolved down.
Ultimately, this is a bias-down environment. Testing the 2192.00 bias-down target is likely also to visit 2187.50.
At this stage, nothing yet requires anything deeper, let alone durable. Indeed, the bias-down signal missed opportunities to be optimal — triggering late, then not already breaking to fresh lows through the 10:30 grace period. Even now, RSIs are avoiding oversold territory despite finally retesting the overnight low..
Trending down is being fought by limiting dips to only short spurts, which tends to resolve in a sudden, steep and substantial push down. That leg may be starting now as 2192.00 is being attacked to within 2 ticks.
Pre-market Tour (recording & summary)
Backing off ANOTHER brink? Consolidating at 2195.00 support for 6 hours didn’t break lower, but higher, back up to 2203.00. That’s within 3 of where yesterday’s session greeted its final 3 minutes, which then suddenly plunged to fresh session lows. So, it is resistance. Probing any higher would likely test this morning’s 2206.50 bias-up signal. Not gapping down re-opens the door to one of the two setups that could — yet again — rescue the rally from being on the brink of a pullback targeting 2187.50. That setup would still require isolating a probe of fresh lows. More likely, the recovery’s challenge will be either to trigger bias-up.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Third time, not so charming.
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…
Testing Wednesday morning’s 2213.25 bias-up target pre-open and to within 1 tick post-open held up long enough to form an anchor. But price resolved down, anyway, rejecting the 2207.75 bias-up signal. That put into play a test of 2199.75, which the afternoon bias environment fulfilled it. RSIs diverged positively on its retest to help launch a bounce. But it had gotten late, and counter-trend sponsorship didn’t stop another drop to fresh lows at 2197.50. It was the third consecutive session ending in decline.
Overnight action’s new info…
A relatively shallow bounce attacked 2202.00 before reversing to fresh lows at 2194.25. Reacting up to attack 2199.00 before Europe’s opens has only maintained that range throughout. Now its lower-end is being attacked again as US traders start arriving into the arena.
If, then…
Wednesday was the third consecutive session ending on the brink of rolling over. Thursday may be the first session not to fight back. Neither of the two setups for rejecting the late dip is possible if the open were to gap down, as is indicated currently. And not rejecting Wednesday’s late break will likely trend down Thursday morning. Wednesday morning’s anchor still suggests this reaction down will be recovered. But simply attacking last week’s 2192.00 support at this stage should ultimately probe it down to 2187.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2196.25 would be likely to trigger the 2197.50 bias-down signal at 10:15. Exiting the open above 2201.50 would be unlikely to trigger bias-down.