Posts by Rod David
Mid-day Update… Stopping optimistically short.
Retesting same level that held Friday’s drop.
Friday’s low formed when its intraday decline filled a three-week old gap back down to 2160.00. Its “unfinished business below” was one of several that offered context to the subsequent rally being unsustainable. Anyway, its late-afternoon test couldn’t attract new sponsorship, and price bounced into the weekend.
Now Monday’s interim rally to 2181.50 has been retraced to retest 2160.00.
The test this time is shallower, barely piercing 2160.00. It did trigger the 2164.50 bias-down signal, and its target is to probe 1 point under Friday’s 2157.50 bias-down target.
Today’s price action is entirely in-line with the massive topping rolling over. But even if we knew with a 100% degree of certainty the bounce would resolve down, a bigger detour can’t be dismissed. Not too much — there’s still limited time for a drop to get underway or out-of-the way.
Look ahead: Economic Calendar – for Thu Sep 1, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is heavy, even when considered in the context of an otherwise busy week. Pre-open reports are high-profile, but not necessarily influential. Nevertheless, any reaction to the pre-open reports is likely to be duplicated by the post-open reports. The noon hour’s Fed speaker is among the least influential to price action.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
*PMI Manufacturing Index
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*Loretta Mester Speaks
12:25 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2172.00 | 2170.75 |
| …would target | 2178.00 | 2177.00 |
| Bias-down: under | 2165.50 | 2164.50 |
| …would target | 2157.75 | 2156.50 |
| Signal status: BIAS-DOWN | 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… Still slow-rolling.
Gap down eventually slides.
The open gapped down to the 2171.50 bias-down signal. Fluctuating around it through the first 45 minutes invoked the grace period, just as that window was opening. Price was already sliding by 10:15. A negative knee-jerk reaction to EIA dug the knife deeper to help trigger late bias-down.
That reaction plunged to touch the 2166.00 bias-down signal. So far, it’s holding. Not reacting, but holding.
Oversold RSIs at the low would undermine a recovery attempt until retested. Back above 2170.00 would start to signal momentum reversing up, anyway, at least temporarily. But the likelier scenario is that the corrective bounce from Friday’s low has given way to a new downleg, targeting fresh lows.
Pre-market Tour (recording & summary)
I’m aware there was an issue logging into the chaRTroom this morning. I’m contacting support to confirm whether they are aware of any problem…
ADP issues a report on the Wednesday prior to Friday’s monthly Employment Situation report. Many view its data as a proxy for what to expect Friday from the government. I view the market’s reaction as an indicator of what to expect Friday from the market.
The market’s negative reaction to this morning’s weaker report suggests it doesn’t like there being an excuse to avoid a rate hike. It is counter-intuitive, but worse for the market than “bad” news is bad news hovering indefinitely over it. Should be interesting Friday.
Details and other markets coverage are discussed in the pre-market Tour recording here.