Posts by Rod David
Look ahead: Economic Calendar – for Fri Jul 15, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open Retal number doesn’t often influence price action. But being released simultaneously with the CPI does raise its profile, making it possible either to confirm or invalidate each other. That will set the stage for the post-open Consumer Sentiment report’s influence on price action.
James Bullard Speaks
Day 2 of Monetary and Financial Institutions Forum
*Consumer Price Index
8:30 AM ET
*Retail Sales
8:30 AM ET
Empire State Mfg Survey
8:30 AM ET
Industrial Production
9:15 AM ET
Business Inventories
10:00 AM ET
*Consumer Sentiment
10:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
*Neel Kashkari Speaks
1:15 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2168.75 | 2162.25 |
| …would target | 2175.00 | 2168.75 |
| Bias-down: under | 2162.75 | 2156.50 |
| …would target | 2157.00 | 2150.50 |
| 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… Soaking it in.
Post-open dip recovers, but doesn’t reverse.
A gap up was maintained, but not extended. The rally’s trend remains entrenched, but in need of refueling.
Opening at 2160.25 immediately extended down to 2155.50 throughout the entire first 15 minutes of volatility. That’s a retest of the 2156.00 area where the overnight rally had greeted Europe’s opens. And its where the overnight reaction down from 2168.00 had bottomed.
Simultaneously oversold RSIs at the retest of 2156.00 enabled a bounce. Despite probably being only obligatory, the bounce reached fresh post-open highs up to 2163.00.
2155.50 doesn’t provide much refueling for the rally. Extending higher to retest the overnight high up to 2169.00 would likely reverse down more substantially. But a deeper pullback could produce a more durable upleg from 2153.00
2153.00 is in-play so long as 2160.00 isn’t recovered. Back above 2162.00 would start to signal the high’s retest underway already.
Pre-market Tour (recording & summary)
The reaction down from 2168.00 tested and retested 2156.00 while RSIs diverged positively. A similar setup accompanied its retracement up to 2165.00.
Preliminary indications during the opening 15 minutes of volatility are essentially the 2159.00-2164.00 range. Breaking either way through 9:45 would likely extend 5-6 points in that direction.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Hurrying to a high.
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…
Wednesday’s 2152.25 pre-open high wasn’t a “new Globex trend extreme” requiring retest intraday, making it more easily reversed post-open down to the 2139.50 morning low. The balance of the session recovered choppily and gradually to attack 2148.00, ending essentially unchanged around 2145.00. No traction was gained, but there was a second consecutive close above 2143.00 and bullish WedEX triggered.
Overnight action’s new info…
A shallow dip was supported for awhile by 2143.00 before firming back up to Wednesday’s 2148.00 post-open highs. A surge attacking 2158.00 into Europe’s opens was extended up to 2162.00 out of Europe’s opens. And a consolidation there broke higher to touch 2168.00. JPM earnings triggered a reversal down that has extended to 12 points as BOE keeps rates unchanged, touching 1256.00 where Europe opened.
If, then…
The second consecutive close above 2143.00 created higher objectives at 2158.00 and potentially also 2168.00. The latter was the overnight high, and it is reacting down already 14 points. But complexity during the rally to 2168.00 makes it a “new Globex trend extreme” that requires being retested intraday, often the same day. Maintaining a gap up above Wednesday’s 2149.00 highs is the only credible path to resuming the rally without delay, or at least to ensure that a post-open dip would be recovered. As does the bullish WedEX. A post-open pullback might take advantage of having three upside influences helping to ensure that a dip would be recovered.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2158.00 would be likely also to exceed the 2154.75 bias-up target at 10:15 to renew the bias-up signal.