Posts by Rod David
Look ahead: Economic Calendar – for Fri Sep 9, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports are scheduled Friday. The pre-open Fed speaker is too early to impact intraday price action. The midday rig count could be more influential than normal due to this week’s big back-to-back surprises in API and EIA data.
Eric Rosengren Speaks
7:45 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Mid-day Update… Last last gasp?
Rejecting yesterday afternoon’s bounce now awaiting a repeat.
This morning’s 2167.25 bias-down target has become “unfinished business below.” The bias-down signal was no more productive after triggering at 10:15 than before it. So, invalidating the bias-down signal required recovering the 2180.50 bias-up signal as the bias environment was lapsing. And the morning’s bounce only reached 2177.25.
Recovering 2176.75 would still start to signal momentum reversing up. The morning’s bias environment only pierced it by a tick. And now this morning’s 2173.25 bias-down signal is being retested. It’s not exactly giving way, but yesterday’s 2170.50 low has been tested enough that even obligatory support is unlikely.
I’m tracking the timing of a next downleg, assuming there is one. Recall that yesterday afternoon bounced throughout, and its rejection was delayed until pre-open. Rejecting this morning’s bounce this afternoon would suggest the market is becoming more pessimistic. The depth and slope of its downlegs would be likely to increase simultaneously.
If only retesting yesterday’s low was sufficient to end selling pressure, then this morning’s bias-down signal shouldn’t have triggered. At least its target should have been rejected. But while a delayed recovery wouldn’t be sponsored by strong hands, it could still be a substantial detour, so be sure not to get caught short on a big bounce.
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2186.00 | 2178.25 |
| …would target | 2191.50 | 2183.75 |
| Bias-down: under | 2180.00 | 2172.25 |
| …would target | 2175.00 | 2167.25 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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… Bearish context confirmed.
Bias-down, until disproved, which they’re trying.
This morning’s bias parameters have been updated HERE to reflect the Dec discount.
The pre-open 9-1/2 point slide to 2170.00 (basis Dec) had fulfilled the likely retest of yesterday’s 2170.50 low. Holding its retest through the open could have signaled that sellers were done. Testing it post-open down to 2169.25 did bounce, but not until after triggering the 2173.25 bias-down signal at 10:15.
So, this is a bias-down environment.
That didn’t prevent violating the 2171.50 bounce limit. And it didn’t prevent a surge up to 2176.25. But it’s too late for recovering the 2173.25 bias-down signal to be relevant. Invalidating bias-down must now recover the 2180.50 bias-up signal when the bias environment begins lapsing at 11:30.
Meanwhile, this is a bias-down environment.
We assume the surge to 2176.25 is only a temporary detour, a last gasp of buying. Back under 2172.75 would start to signal the bias-down remains influential. Otherwise, back above 2176.75 would target a test of the 2180.50 bias-up signal — and possibly also its recovery through 11:30 to invalidate the bias-down.
Pre-market Tour (recording & summary)
The ECB statement was greeted by the market having returned to unchanged at 2179.50 basis Dec (2185.50 basis Sep). Its knee-jerk reaction dipped 2 points, which were soon recovered — but not reversed, as Draghi’s press conference was also greeted at unchanged. Which apparently was unsatisfactory to him.
A 9-1/2 point slide has now probed under yesterday’s low at 2170.50 basis Dec (2177.50 basis Sep), fulfilling its likely retest. Holding its test through the open could also avoid triggering the bias-down signal at 2173.25 basis Dec (2179.75 basis Sep), which would put into play an offsetting test of the bias-up signal.
Not holding yesterday’s low and triggering bias-down could get very ugly through tomorrow morning, if not longer.
Details and other markets coverage are discussed in the pre-market Tour recording here.