Posts by Rod David
Look ahead: Economic Calendar – for Wed Nov 2, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The proximity to reporting monthly employment data brings with it several private takes on the picture. ADP’s report is controversial, but reaction to it helps to fine-tune our expectations for Friday. Meanwhile, the afternoon’s FOMC meeting isn’t likely to finally rate hikes, but harsher language warning of it could be as influential to price action.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
Treasury Refunding Announcement
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Meeting Announcement
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2123.25 | 2117.00 |
| …would target | 2128.00 | 2122.00 |
| Bias-down: under | 2117.00 | 2111.00 |
| …would target | 2111.25 | 2105.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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… Resistance held.
Essentially straight down since the open.
Opening at 2125.00 quickly began sinking. The 2124.25-2125.00 intraday resistance held, and the gap back to yesterday’s close was filled down to 2119.50. Lower and lower lows have extended down to 2115.50.
The 2117.75 bias-down signal defined support momentarily, and now it is defining resistance. Overlapping it at 10:15 has invoked the grace period through 10:30.
An optimal “late bias-down” would probe under 2115.50 through 10:30. Probing under Friday’s 2112.50 low would allow a bottom to form, but its test is likely to visit 2105.00. And that would be vulnerable to extending down to 2095.00 and 2082.00.
Not triggering the 2117.75 bias-down signal at 10:15 might bounce back up to yesterday’s 2120.00 and 2120.75 futures and cash session closes. That’s also yesterday’s “higher prior lows.” Further strength than that would be unlikely.
Still overlapping 2117.75 at 10:30 would trigger “noN-bias” and have now required outcome today.
Pre-market Tour (recording & summary)
Retracing the overnight bounce to 2129.50 has tested and retested the 2123.00 area. Holding under 2124.25-2125.00 or quickly rejecting a probe above it would keep alive the likelihood for breaking under yesterday’s 2119.00-2120.00 lows, and to at least retest Friday’s 2112.50 low. Otherwise, recovering 2124.25-2125.00 would make Friday’s 2135.25 high become a bigger attraction.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Done waiting.
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…
Monday’s session was choppy but only ranged around Friday’s close. It was narrower than the overnight range, which was narrower than Friday’s range. But there was at least one predictive feature. The morning’s 2120.00 low stopped optimistically short of touching Friday’s lows. And it was retested after an intraday bounce had probed fresh post-open highs. The first bounce is potentially bearish from a contrarian perspective. Returning to the bounce’s origin all but requires at least an obligatory low. It had become too late to attract sponsorship for breaking lower, making another interim bounce likely, first.
Overnight action’s new info…
Last night’s range is wider than Monday’s. The Globex open quickly fulfilled the intraday corrective bounce potential up to 2124.25-2125.00. But there was greater potential for extending the corrective bounce overnight. It was fulfilled by only attacking yesterday’s 2130.50 intraday high to within 1 point. Its reaction down to 2123.25 bounced 4 points, but that bounce is now reacting back down through 2124.25-2125.00.
If, then…
Monday’s relatively narrow range was disappointing. Especially after Friday’s luscious volatility of a failed recovery and its deep drop. But Monday’s multiple fluctuations between positive and negative territory kept volatility alive. And last night’s range was as wide or wider than Monday. Perhaps anxiousness ahead of tomorrow’s somewhat predictable FOMC policy statement has already had a paralyzing effect. Still ranging narrowly through today is a lot of patience to ask of the market. Holding under 2124.25-2125.00 post-open would keep alive the likelihood for a pessimistic dive under Monday’s 2119.00-2120.00 lows, retesting Friday’s 2112.50 low down to 2105.00, and possibly another 10 or 25 points lower. Avoiding any pessimistic dive today would make a bigger bounce likely, and then its failure.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2127.75 would be likely to trigger the 2125.50 bias-up signal at 10:15. Exiting the open under 2124.25 would be unlikely to trigger bias-up. Exiting the open under 2116.00 would be likely to trigger the 2117.75 bias-down signal.