Posts by Rod David
Mid-day Update… Hope springs a leak.
Early anticipation finds late sellers.
The ongoing pattern remains active, if not overactive. Abruptly rejecting the latest rally effort didn’t wait for post-open strength. The 2179.00 open’s gap up was reversed immediately, back down to yesterday’s 2177.50 close, and through it to 2170.00.
This morning’s 2171.75 bias-down signal needed to define the range’s lower-end. Essentially, it did. The pre-open restrained optimism and post-open immediate pessimism didn’t gain traction. They’re still potentially bullish from a contrarian perspective.
None of which requires an immediate recovery, or prevents extending lower. Not resolving Monday’s 2171.00 lower objective would have made its break likely Tuesday to compensate for the delay. Not resolving it Tuesday makes its test likelier to hold since Tuesday created a better anchor above. An afternoon rally remains possible, if not likely, so long as this morning’s lows hold.
Look ahead: Economic Calendar – for Thu Aug 11, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Markets are closed in Japan Thursday. Three large US department stores report earnings (KSS, M, JWN) which might inform Friday’s Retail Sales report. Otherwise, the noon hour’s 30-year auction is the day’s only influential “report”.
Jobless Claims
8:30 AM ET
Import and Export Prices
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond 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 | 2181.00 | 2177.00 |
| …would target | 2186.00 | 2182.00 |
| Bias-down: under | 2173.00 | 2169.00 |
| …would target | 2168.00 | 2164.00 |
| 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… Skittish buyers.
Overnight bounce is retraced.
Testing the 2181.25 bias-up signal overnight was attacked twice more before the open. The restrained optimism was potentially bullish from a contrarian perspective. But it was only pre-open, so it hadn’t yet been triggered.
And it wasn’t. The open immediately began dipping. The gap back down to yesterday’s 2177.50 close was filled, and then probed almost 2 points lower momentarily Neither bias signal was touched post-open, making this a no-bias environment.
Holding the pullback to yesterday’s closing gap would make the post-open pessimism ineffectual. Also potentially bullish from a contrarian perspective. It’s similarly interesting that abruptly reversing a rally effort was influential pre-open. that’s perhaps a little too pessimistic, considering there is still unfinished business above at 2185.50.
No offsetting test of the bias-down signal is required. If tested anyway, it should define the range’s lower-end. Exiting this morning’s bias environment in positive territory would suggest this morning’s pessimistic effort had failed. An afternoon could rally begin.
Pre-market Tour (recording & summary)
The open is being greeted with restrained optimism. The 2181.50 high’s reaction down had been recovered almost entirely. Now its reaction down has been recovered almost entirely, too. The particular points of hesitation reflect a degree of pessimism that is potentially bullish from a contrarian perspective. So, trending up to test 2185.50 can start developing quickly post-open. So much so, that NOT trending up quickly post-open could become bullish quickly, too.
Details and other markets coverage are discussed in the pre-market Tour recording here.