Posts by Rod David
Look ahead: Economic Calendar – for Fri Jul 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open Employment Situation report is highly reliable for triggering a reaction, but there are no other morning reports to duplicate it. The afternoon’s rig count triggered a volatile reaction last week, as did Wednesday’s API and Thursday’s EIA reports.
*Employment Situation
8:30 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2105.00 | 2097.50 |
| …would target | 2110.50 | 2103.25 |
| Bias-down: under | 2095.25 | 2088.00 |
| …would target | 2089.50 | 2082.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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… Holding up.
Modest gap up surges to fresh highs.
Gapping up to and/or through yesterday’s high was the minimum requirement to assume new sponsorship had arrived to extend yesterday’s rally. The 2094.25 opening print qualified.
Quickly exceeding the 2098.00 overnight high was less a requirement and more confirmation. Preferably 2099.50 would have been recovered by then, too. It was being tested, on the way up to 2102.00.
Overbought RSIs require the high’s retest. The 2103.25 bias-up target is in-play. A pullback to 2098.00 has reacted up to 2101.50 and can extend higher so long as 2098.75 continues holding as support.
A high-interest congressional hearing underway currently may be siphoning energy from the market and inhibiting trending. Trending in that situation is more difficult. By the same token, a knee-jerk reaction to other news would be likelier to retrace.
A deeper detour down to 2095.50 can’t be discounted. The 2097.00 bias-up signal should define the range’s lower-end if tested — probing under it should be brief and quickly reversed up.
Pre-market Tour (recording & summary)
Reacting down from overnight highs at 2098.00 has now dipped a little back under yesterday’s highs, down to 2089.75. That’s the level whose recovery through another close has signaled the next higher objective at 2125.25.
But its recovery Friday didn’t prevent an interim pullback. Neither did its recovery yesterday.
Not gapping up this morning would suggest negative territory will be probed at some point today — especially if overnight highs were probed despite not gapping up. Gapping up above yesterday’s highs and extending quickly through overnight highs would be the most reliable bullish signal for today.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Signs of life.
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 post-open attempt to extend the overnight lows was inappropriately-timed. Its weak-handed sponsorship tested 2066.00, before reversing back up through the balance of the session. Eventually testing 2094.00 neutralized the attraction to last Friday’s 2093.00 higher prior lows, late enough to avoid reacting down.
Overnight action’s new info…
Flat-to-higher ranging absorbed Europe’s weak opens and temporarily probed fresh highs up to 2098.00. Yesterday’s late highs are being tested now as support down to 2091.00.
If, then…
Wednesday’s recovery didn’t gain traction, despite trending up into the close. So, extending the rally this morning without delay would require gapping up, probably above 2097.00. And having tested 2097.00 already overnight, its 2098.00 should be exceeded quickly, too. Not gapping up, or not maintaining a gap up, would be vulnerable to another pullback — perhaps briefer and shallower than yesterday — down to 2082.00..
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2099.50 would be likely to trigger the 2097.00 bias-up signal at 10:15. Exiting the open under 2092.00 would be unlikely to trigger bias-up.