Posts by Rod David
Pre-market Tour (recording & summary)
A fresh low printed momentarily down to 2171.75 in reaction to an econ report. But the heresy was put down quickly by snapping back up into the otherwise narrow overnight range. The market quietly awaits the embargo being lifted on Yellen’s opening remarks at 10:00am (previously stated incorrectly as 11). The session will depend on whether a test of 2187.75 above or ~2168.00 below is held or broken through a relevant timing window.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Waiting for another shoe.
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…
Thursday’s open gapped down to test Wednesday’s 2168.75 low, and snapped back up to avoid triggering bias-down. Its offsetting test of the 2178.75 bias-up signal became “unfinished business above,” with 2177.00 resistance defining the session’s high. In fact, while 2177.00 was likely to be an obstacle to the rally, its reaction retested the open’s low down to 2167.50. The cash session bounced back up to 2172.00, and futures closed at 2174.25.
Overnight action’s new info…
Thursday’s late bounce firmed slightly to touch 2175.00. Choppy ranging into Europe’s opens held 2172.75.as support while piercing slightly higher to 2176.25. Another dip has returned back down to 2172.75.
If, then…
Following yesterday’s two near-death experiences of probing Wednesday’s low, the overnight quiet may seem reassuring. Rather, its narrow range is like a thug waiting around the corner up ahead, on a deceptively quiet street. That corner is the cash session open, which is where it will either jump out at the market to attempt another break lower, or else shrink away to allow another bounce into the weekend… Not extending down Thursday doesn’t mean the decline has lost any traction or momentum. Closing under 2177.00 kept those elements alive. That should prevent another corrective bounce — if the decline is going to extend eventually, then there isn’t any reason to further delay it today. But whichever direction the morning takes, don’t forget that Friday mornings can be exacerbated by the two days of illiquidity bearing down.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2174.25 would be unlikely to trigger the 2177.00 bias-up signal at 10:15. Exiting the open under 2166.00 would be likely to trigger the 2166.00 bias-down signal.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2179.00 | 2177.00 |
| …would target | 2184.00 | 2182.00 |
| Bias-down: under | 2169.00 | 2167.00 |
| …would target | 2163.75 | 2161.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Mid-day Update… Adrift?
SPECIAL NOTE: I will be away from the screens on the afternoons of both Thursday and Friday, this week and next, Thank you for allowing me to be of personal assistance in a family matter.
The 2177.00 minimum objective to the first upleg was met at the morning bias environment’s high. Its reaction down to 2172.50 is bouncing, now attacking 2176.00. This morning’s 2178.75 objective remains outstanding, but a fresh low under 2172.50 would be difficult to recover.
Assuming no fresh low, then the balance of the session can extend up to 2178.75. Closing back under 2177.00 would help to confirm the trend has reversed down. Closing any higher could bounce further, but not necessarily to a new high.
Look ahead: Economic Calendar – for Fri Aug 26, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The world’s central bankers and private bankers Jackson Hole meeting begins. So, yah. Fed Chair Yellen speaks after several econ reports that are higher-profile than influential. Still, any reaction to the pre-open GDP is likely to be duplicated in reaction to post-open reports.
GDP
8:30 AM ET
International Trade in Goods
8:30 AM ET
Corporate Profits
8:30 AM ET
PMI Services Flash
9:45 AM ET
*Consumer Sentiment
10:00 AM ET
*Janet Yellen Speaks
11:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET