Posts by Rod David
Look ahead: Economic Calendar – for Wed Oct 19, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s two Fed speakers — one pre-open, one in the afternoon — will frame a Fed focus so that reaction to the Beige Book release should be very single-minded, at least initially.
MBA Mortgage Applications
7:00 AM ET
Housing Starts
8:30 AM ET
*John Williams Speaks
8:45 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Rob Kaplan Speaks
1:30 PM ET
*Beige Book
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2145.50 | 2139.25 |
| …would target | 2150.50 | 2144.50 |
| Bias-down: under | 2139.75 | 2133.75 |
| …would target | 2133.75 | 2127.50 |
| 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… Halved.
Gap up becomes post-open dive that retraces half the overnight rally.
The overnight rally had attacked 2140.00, and greeted the open less than 1 point lower. that’s a lot of buying pressure, but was it too much to attract new sponsorship? Testing the 2137.00 prior high during the opening 15 minutes of volatility would soon tell us. That required exceeding it to indicate that the overnight rally’s momentum remained intact.
It wasn’t.
Reacting down under 2136.00 targeted 2132.50, which was soon tested down to the 2131.75 bias-up target. Consolidating there maintained the recovery above 2131.75 through 10:15 to renew the bias-up signal. Sounds bullish.
Perhaps not.
2136.75 is the renewed bias-up target. It was already tested, so its retest isn’t required. Back above 2132.50 (being tested now) would signal its test is underway. But back under 2130.00 first would suggest not. At least not until neutralizing oversold RSIs at the post-open low.
Pre-market Tour (recording & summary)
The overnight rally has extended to attack 2140.00. The open is being greeted from above what would be the 2136.75 renewed bias-up signal. Now another prior high is being tested around 2136.75, and exceeding it or not through the open could define the next significant leg’s direction.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Another overnight run.
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 open had recently recovered from Sunday night’s slide to 2116.75, back up to unchanged at 2127.00. The open’s blip-up to 2130.00 reacted down 9 points through the open. Its partial recovery was reversed down deeper to test 2118.00, and the balance of the session chopped its way slightly higher into the close. “Unfinished business” was left outstanding both above and below, at 2132.25 and 2116.00, respectively.
Overnight action’s new info…
Monday’s last late chop from 2119.00 up to 2124.00 was corrected immediately at the Globex open down to 2120.25. The balance of the night has trended up relentlessly to 2135.50, until a 4-point dip that is now trying to recover.
If, then…
Buyers didn’t gain traction Monday, so rallying requires gapping up, above the morning’s 2129.00-2130.00 highs. And also above 2132.25 if it is touched post-open. Touching it overnight doesn’t yet invoke this requirement. And regardless of by how much it was pierced, rejecting its test through the open could slingshot the market back down — under Monday’s lows to retest Thursday’s 2107.75 low down to at least 2105.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2133.75 would be likely also to exceed the 2131.75 bias-up target at 10:15, renewing the bias-up signal and next targeting 2136.75. Exiting the open above 2128.00 would be likely at least to trigger the 2125.75 bias-up signal at 10:15.