Posts by Rod David
Look ahead: Economic Calendar – for Mon Jul 4, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: US markets are closed Monday for the Independence Day holiday. Globex opens normally Sunday and Monday nights.
Independence Day holiday
US Markets closed
Globex close
1:00 PM ET
Globex regular open
6:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2107.25 | 2099.25 |
| …would target | 2113.00 | 2105.25 |
| Bias-down: under | 2098.00 | 2090.25 |
| …would target | 2092.25 | 2084.25 |
| 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… Good to the last pop.
Single-minded relentless rallying has come full circle.
A post-open overt rally effort was all but assured when the overnight dip had recovered back up to yesterday’s 2088.75 highs. This was all the more likely when their shallow pre-open probe hovered narrowly around 2090.00 — that restrained optimism, or pessimism, was bullish from a contrarian perspective.
And that bullishness was soon realized.
The open surged to consolidate above the 2092.50 bias-up signal at 2094.00. Resolving up has extended to the 2098.25 bias-up target. The bias-up signal wasn’t renewed, but fresh highs are being probed anyway to attack 2101.00.
Last Thursday’s 2089.75 lower prior highs have been probed through a relevant timing window — entering the bias environment. The recovery’s reward is to probe Thursday’s 2019.50 prior high. Creating this upside objective has entrenched the rally, which allows it to safely refuel by dipping.
No other refueling opportunity this week has been exploited. Today’s “Friday Factors” introduce vulnerabilities, but don’t require a different resolution to the recent pattern. And those vulnerabilities didn’t prevent already probing through last Thursday’s mid-day congestion around 2098.25.
One of those Friday Factors is the tendency for afternoon ranging or backing-and-filling. Early trending can be exacerbated by afternoon orders being shifted forward. I doubt there’s much appetite left for getting long up here, but there still may have been a lot of short-covering. Regardless, we’ll soon see whether yet another relentless rally can still be so single-minded.
Pre-market Tour (recording & summary)
The overnight recovery from Europe’s opens has tested 2091.50. The open is being greeted at or above yesterday’s 2088.75 highs. Triggering bias-up would get every benefit of the doubt for extending higher, even if only through the morning. That said, there is extra potential ahead of the three-day holiday weekend for sellers to exploit early strength and/or early weakness.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… “If you can keep it.”
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…
Lacking a single-minded relentless overnight rally didn’t deter Thursday’s intraday action from once again rallying sharply to fresh recovery highs. The open’s gap up to 2068.00 first reacted down 7 points to fill the gap back to Wednesday’s 2062.00 cash session close. Then the balance of the day resumed the rally. The last 60-90 minutes consolidated pessimistically short of touching last Thursday’s 2089.75 “higher prior lows.”.
Overnight action’s new info…
Uncharacteristically narrow ranging developed mostly between 2085.00-2088.00. Dipping through Europe’s opens down to 2081.50 was recovered back into the earlier range, and now the range’s upper-end is being probed by fresh highs attacking 2090.00.
If, then…
Is it only a correction, or a recovery back to week’s highs? “The latter, madam, if you can keep it.” The maximum corrective rally had room up to last Thursday’s 2089.75 higher prior lows, or else last Thursday’s 2119.50 post-close highs would become targeted up to 2125.25. Stopping pessimistically short of the resistance yesterday afternoon is potentially bullish from a contrarian perspective. Even the most bullish resolution doesn’t preclude a temporary detour back down, like to 2071.00, whether from only attacking 2089.75 or after probing above it intraday. A more serious reversal down should have greeted today’s open already in decline, which doesn’t seem likely now.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2091.00 would be likely also to trigger the 2092.50 bias-up signal at 10:15. Exiting the open under 2084.25 would be unlikely to trigger bias-up.