Posts by Rod David
Look ahead: Economic Calendar – for Tue Nov 1, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s PMI and ISM numbers are reliable for influencing price action, despite Monday’s PMI miss not having had much impact.
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2134.75 | 2128.75 |
| …would target | 2140.00 | 2134.25 |
| Bias-down: under | 2127.00 | 2121.25 |
| …would target | 2121.25 | 2115.25 |
| 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… Dry cleaners morning.
lede .
The pre-open 5-point bounce up to 2129.00 was retraced almost entirely to open at 2125.25. Flat-to-lower since then has attacked 2121.25, whose test early enough could have been predictive. It’s still support, which is why attacking it just reacted up to 2125.25. But its test was too late to reveal whether sellers are weak-handed, or gaining sponsorship.
This are is also unchanged. Unchanged, compared to both Friday’s cash session and futures closes. So, it is natural support, and it’s not being challenged with any momentum that might better enable breaking through it or snapping back from it.
That suggests a “dry cleaners morning,” which is either unlikely to trend or will fluctuate unpredictably. The likely resolution is down, but a bounce is possible while awaiting sponsorship’s arrival. There is meanwhile room to fluctuate between the 2117.50 and 2131.00 bias signals, both of which were tested or attacked overnight.
Pre-market Tour (recording & summary)
The overnight bounce into positive territory up to 2130.50 had been retraced to almost 2124.00. Reacting up to 2129.00 has corrected that dip, while narrowing the range around 2126.75 — which is essentially the 61.8% retracement of Friday afternoon’s plunge. Recovering it through the open, or not, would suggest whether the next downleg had begun.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Not rejecting.
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…
Friday’s session had recovered from probing fresh lows overnight down to 2116.00. Potential to 2137.50 was attacked to within 5 ticks when the FBI headline triggered a 23-point plunge to fresh lows at 2112.50. Bouncing choppily into the last half-hour attacked 2128.00, retracing 61.8% of the plunge. No “unfinished business” was left outstanding but it was the fourth consecutive lower close and lower intraday lows.
Overnight action’s new info…
Sunday night’s open blipped-down to 2114.75 and bounced quickly into a 2119.00-2122.00 range. An eventual breakout rallied up to 2130.50, 7-8 points back into positive territory. Its retracement has been attacking 2124.00.
If, then…
The origin of Friday afternoon’s plunge was a little premature. But not by much and not at all unexpected — the overnight low’s retracement was likely. The plunge’s 61.8% retracement also tested “higher prior lows” before the close, fulfilling a correction. Bouncing overnight doesn’t preclude launching a new downleg, not this shallow of a bounce, not without also gapping up above Friday afternoon’s highs (currently 11 points higher). Four consecutive lower closes all but require at least an intraday fresh low before any recovery would be credible.
First Trade…
[Click here to view the Bias parameters] Exiting the open under 2127.75 at 9:45 would be unlikely to trigger the 2131.00 bias-up signal at 10:15. Exiting the open above 2121.25 would be unlikely to trigger the 2117.50 bias-down signal. Exiting the open under 2116.75 would be likely to trigger bias-down.