Posts by Rod David
Look ahead: Economic Calendar – for Thu Dec 1, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: A lot of industrial economic data are scheduled for release Thursday. Reports have been strong, and the market has not been scared, seeming to want a rate hike to be gotten out of the way. Any obvious reaction to the pre-open reports is likely to be duplicated by the post-open reports.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
*Loretta Mester Speaks
8:30 AM ET
Robert Kaplan Speaks
9:00 AM ET
*PMI Manufacturing Index
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2211.75 | 2210.50 |
| …would target | 2216.50 | 2215.50 |
| Bias-down: under | 2202.50 | 2201.50 |
| …would target | 2196.25 | 2195.00 |
| Signal status: NO-BIAS | 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… Mixed-up signals.
Divergent post-open actions.
Gapping up above prior highs was maintained at least halfway thorough the opening 15 minutes of volatility to establish an anchor. An anchor provides a recovery in case of a corrective dip. We’ll see.
Maintaining the gap up above the prior afternoon’s high — after having trended down into the close — formed a “session-long rally” setup. But it is at risk of inverting down, so that each timing window probes the prior timing window’s low, instead of probing the prior timing window’s high.
That risk of inverting down comes because bias-up didn’t trigger. The 2207.75 bias-up signal was overlapped in time to invoke the grace period. And extending down to 2204.00 didn’t recover in time to trigger late. Its reaction up is testing 2207.75 now, but it’s too late to trigger. Instead, an offsetting test of the 2199.75 bias-down signal is in-play.
An offsetting test of the 2192.75 bias-down target is almost in-play, too. It would be in-play officially had the 2113.25 bias-up target been touched. It was probed by 2 ticks pre-open, and attacked by 1 tick post-open, but not touched when its rejection would matter. Unofficially, be aware of the potential for extending down to 2192.75, anyway — which would likely also visit 2187.50.
Meanwhile, I’m concerned that this morning’s timing window influence is 10 minutes delayed. Perhaps the onslaught of OPEC headlines has concussed the market. Price action 10 minutes following each of the 9:45, 10:15 and 10:30 windows would better explain why the we’re currently under yesterday’s highs. Rallying this morning above 2208.75 would confirm it. The trend is otherwise down.
Pre-market Tour (recording & summary)
The overnight recovery had probed yesterday afternoon’s highs and come within 1 tick of neutralizing “unfinished business above” at 2110.50. A consolidation held yesterday afternoon’s 2208.50 lower prior highs before extending sharply to attack 2114.00. That’s also testing this morning’s 2113.25 bias-up target, whose recovery through 10:15 would renew the bias-up signal next targeting 2220.00. Rejecting the gap up before halfway through the opening 15 minutes of volatility would start to suggest that the entire overnight rally were being rejected, too.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Backing off another brink.
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…
Tuesday’s bounce came to within 1 point of neutralizing “unfinished business above” at 2210.50. Then the afternoon bias environment began lapsing, and proximity didn’t matter. The unfinished business was left outstanding. Reversing down sharply to 2201.25 probed back within the morning’s “lower prior highs.” The late low stopped just several ticks optimistically short of natural support at unchanged at 2200.00-2201.00. Firming into the close held 2203.75, which had been the morning’s bias-up signal.
Overnight action’s new info…
Remnants of Tuesday’s late slide were barely visible after the close. A slightly lower low only touched 2200.75, and only eventually. It was beneficial to still be trading in sympathy with Crude Oil, which required an almost immediate rally, and has produced it. Already retracing up to 2205.50 into Europe’s opens, the recovery has extended to probe yesterday’s high up to 2210.25.
If, then…
A similar setup to yesterday’s open is trying to resolve today in the bullish way that yesterday’s had failed. Both prior sessions’ late drops closed back under relevant support. In both setups, gapping up above the prior afternoon’s highs was the only path to marginalizing sellers for the day. Yesterday’s open was greeted by a failed overnight rally, and its intraday rally failed, too. Last night’s rally may yet fail by this morning’s open, but currently it’s probing fresh highs. Extending higher this morning would be likely at least to attack 2220.00 intraday. Not marginalizing buyers at the open could resume the decline with a vengeance.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2208.50 would be likely to trigger the 2207.75 bias-up signal at 10:15. Exiting the open under 2205.50 would be unlikely to trigger bias-up.