Posts by Rod David
Look ahead: Economic Calendar – for Mon Jul 25, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s sole econ report has no track record for influencing price action.
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2173.50 | 2167.50 |
| …would target | 2179.00 | 2173.00 |
| Bias-down: under | 2166.25 | 2160.25 |
| …would target | 2160.25 | 2154.25 |
| 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… Gravitational pull.
Choppy open makes path up available.
The pre-open reaction down from the 2164.50 overnight high had held several tests of 2160.00. Post-open action slid immediately to 2157.25.
3-4 more 3-4 point swings and 45 minutes later, price action was still holding 2160.00 resistance. Three of the first hour’s five 15-minute checkpoints had overlapped the same relevant level — yesterday’s 2158.50 cash session close — signaling a ‘dry cleaners morning.”
While trending is unlikely, there’s a lot of room for noise. Especially back up to the 2164.50 overnight high, or 1 point higher just to touch the bias-up signal. An interim attraction at 2163.00 is being tested now, and might be an obstacle.
Gravitating up remains likely so long as 2160.00 holds as support. Probing even higher into the afternoon still has potential to test 2171.25. And a test of 2171.25 still has a likelihood for reacting back down sharply.
Pre-market Tour (recording & summary)
The overnight bounce up to 2164.50 had pulled back to 2160.00. Twice. Each reaction up has been shallower and shallower. Gapping up doesn’t prevent a post-open dip that probes yesterday’s lows this morning — but that dip and probe would likely recover. Meanwhile, resuming the overnight rally would target a retest of Wednesday’s highs, which also would be likely to reverse back into the range.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Another shot.
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 lower close failed to confirm Wednesday’s breakout. The alternative setup was fulfilled by trending down sharply instead. No traction was gained Thursday afternoon, but oversold RSIs were left outstanding at Thursday’s 2153.50 low, as was unfinished business above at 2171.25.
Overnight action’s new info…
Thursday’s 2158.00-2159.00 had ranged flat-to-lower down to 2156.00, but recovered entirely ahead of Europe’s opens. Trending since then has extended up to test yesterday afternoon’s 2164.25.sell signal as resistance.
If, then…
It is significant that not only was Wednesday’s breakout not confirmed, but that its reaction was to trend back down. Another breakout attempt today is unlikely. So, attempting another breakout attempt today would likely be rejected, too, perhaps more substantially than Thursday. Not gapping down gives the morning an opportunity to retest Wednesday’s 2169.75 highs, and to fulfill the 2171.25 unfinished business above, first. But similar to confirming Wednesday’s breakout, the alternative to exploiting the opportunity would be to resume Thursday’s decline.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2166.50 would be likely to trigger the 2165.50 bias-up signal at 10:15. Exiting the open under 2161.50 would be unlikely to trigger bias-up.