Posts by Rod David
Look ahead: Economic Calendar – for Mon Oct 10, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The banking holiday tends to impact volatility, to the degree that the closed bond market might be used otherwise to lay-off risk. Bond futures do still trade, along with stocks.
US Holiday: Columbus Day
Banks Closed, Markets Open
Labor Market Conditions Index
10:00 AM ET
TD Ameritrade IMX
12:30 PM ET
Charles Evans Speaks
10:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2149.00 | 2142.50 |
| …would target | 2154.00 | 2147.75 |
| Bias-down: under | 2143.25 | 2137.00 |
| …would target | 2138.25 | 2131.75 |
| Signal status:LATE BIAS-UP | 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… Back on defense.
Still too little optimism to expect a new downleg.
The gap back up to last Friday’s 2160.00 area close remains unfilled. Probing it pre-open does not qualify. More so, its pre-open probe was in reaction to a headline. The gap up testing 2159.00 still represented restrained optimism. So, reacting down — no matter how substantially — can still be recovered.
This morning’s reaction down was 13 points, attacking the 2145.75 bias-down target to within 2 ticks. The 2151.25 bias-down signal triggered late, and was barely confirmed at 10:30. Actually fulfilling the target would be likelier to hold than to break lower, which would target 2140.75.
Rallying this morning back above 2151.25 would be difficult, being a Friday when the morning bias tends to persist through the noon hour. Regardless of how and when it might begin, the bias-down target could be ignored, and the afternoon could simply gravitate higher.
Pre-market Tour (recording & summary)
Payrolls was greeted at the 2153.75 upper-end of overnight choppy ranging. Its knee-jerk reaction spiked up above this week’s highs to 2161.50. Its reaction down plunged to 2149.75. The plunge has been retraced up to 2159.25, ranging around this week’s highs. Rallying post-open has no need for any further backing-and-filling below, but a momentary dip could still be absorbed and reversed back up durably. Filling the gap back to last Friday’s close in the 2160.00 area and then reversing back down under yesterday’s 2154.50 cash session close would be bearish.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Watching the fireworks.
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…
The overnight slide had not been dramatic. But it was persistent, extending through Thursday’s open, and through the morning. A bullish headline crossed at a very opportune moment, as the gap back down to Tuesday’s 2143.50 was being filled to neutralize its attraction. Its sudden and steep reaction was also substantial, surging 10 points to attack 2157.00 into the noon hour. Whether anxiousness ahead of the Employment Situation report made the dramatic reaction possible, that anxiousness is probably responsible for inhibiting the balance of the session. Narrow ranging into the close was followed by a blip-up to 2157.75.
Overnight action’s new info…
Being post-close, the fresh high was irrelevant, and it was retraced into the Globex open. Its retracement extended down to 2149.50 as the British Pound flash-crashed. Price action has otherwise been less of a participant and more of an observer to the fireworks, centering around 2149.50 while ranging choppily between 2148.00-2153.75.
If, then…
Having neutralized the attraction below at the gap down to Tuesday’s 2143.50 close, there’s no bullish reason to retest it. It’s less likely to attract price down, but also less likely to offer support if retested — unless its retest were isolated, like only probing it momentarily in reaction to this morning’s Employment Situation report. Meanwhile, the upside potential remains entirely valid, if not also likely, especially after two-three days of “ineffectual pessimism” at 2156.50 resistance. At least an obligatory probe above it has become increasingly likely.
First Trade…
[Click here to view the Bias parameters] There are no preliminary levels ahead of an Employment Situation report.