Posts by Rod David
Look ahead: Economic Calendar – for Thu Aug 25, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s pre-open Durable Goods report is both high-profile and reliably influential to price action. More so, any reaction to it is likely to be duplicated by any reaction to the morning’s post-open reports.
*Durable Goods Orders
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 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 | 2187.75 | 2185.75 |
| …would target | 2193.00 | 2191.00 |
| Bias-down: under | 2179.00 | 2177.00 |
| …would target | 2172.75 | 2170.75 |
| 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… Take two.
Overnight low probed.
The open was greeted by already probing back under yesterday’s late 2185.00 low. Its overnight probe would not be isolated, which would have been bullish. Rather, its retracement would be likely, which could be bearish.
And it has been retraced, piercing its low down to 2180.50. Isolating its retest to the open could have ended the decline from yesterday’s opening surge. Outlasting the open has instead triggered bias-down under 2182.75. Its 2177.00 bias-down target is in-play. Fresh lows just touched 2178.25.
Extending under 2177.00 through a relevant timing window (e.g. entering the noon hour any lower) would start to suggest the topping pattern we’ve been tracking is unfolding. Until then, it’s still possible for the drop from yesterday’s open to be the correction along the way to new highs.
Pre-market Tour (recording & summary)
The 2187.00 area has held the overnight recovery. Reacting down to 2185.00 must hold to isolate the overnight drop,and to resume the recovery. Otherwise, retesting the 2180.75 overnight low would be likely, and becoming a new downleg would be possible.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Filling the gap.
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…
Tuesday’s gap up almost immediately neutralized any “unfinished business above,” essentially from last Monday. The gap back up to last Monday’s 2187.00 close was filled at Tuesday’s open, and last Monday’s 2190.75 high ‘s high was pierced several minutes later. The balance of the session drifted back down, closing at a fresh session low, which was also last Monday’s 2185.00 opening print.
Overnight action’s new info…
Tuesday’s intraday slide eventually resumed, extending to fresh lows at 2180.75 into Europe’s opens. That essentially fills the gap back down to Monday’s close, testing Friday-Monday’s 2182.00-2184.25 “lower prior highs” as support. Price action since then has rallied to attack 2188.00.
If, then…
Tuesday’s session was a breakout above a three-session range. Essentially being contained within last Monday’s range undermines the breakout. Closing today above yesterday’s high might otherwise confirm the breakout, but that would be undermined, too. The rally would still get a benefit of the doubt, having recovered from the overnight dip back down to lower prior highs — more so, if the overnight dip were isolated by not revisiting any part of it post-open. There is otherwise no unfinished business above to prevent launching a credible new downleg at any time.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2184.25 would be unlikely to trigger the 2182.75 bias-down signal at 10:15. Exiting the open under 2180.50 would be likely to trigger bias-down. Exiting the open above 2190.00 would be likely to trigger bias-up.