Posts by Rod David
Look ahead: Economic Calendar – for Tue Jun 28, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: While Tuesday’s GDP is high-profile, it has a poor track record for influencing price action. Many econ reports probably won’t be influential in this environment.
GDP
8:30 AM ET
Corporate Profits
8:30 AM ET
Redbook
8:55 AM ET
S&P Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2006.25 | 1996.50 |
| …would target | 2013.00 | 2003.50 |
| Bias-down: under | 1995.50 | 1986.00 |
| …would target | 1989.75 | 1980.00 |
| 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… Knife catch. Not quite blindfolded.
Straight down since the open, but targets met.
Coming within 1 point of Thursday night’s 1999.00 limit-down had bounced to greet the open at 2011.00. Price action trended almost straight down from there.
The requirement to retest 1999.00 was fulfilled. Its influence was modest, triggering a bounce that attacked 2004.00.
That didn’t last, and another downleg fell to 1991.25. Retesting 1999.00 down to 1993.50 was fulfilled. The question is whether that’s enough for another bounce.
Another bounce would be relatively substantial at this stage. The 1993.50 target was met just after violating a bounce limit. And before forming a new distribution pattern, let alone triggering it. This pessimism often proves optimistic — which can be bullish from a contrarian perspective.
Only 1-minute RSI is avoiding oversold territory, as the drop extends down to 1988.50. There is still room for noise down to 1980.00. But back above 1999.00 at this stage could trigger a much larger rally than most would have expected today.
Pre-market Tour (recording & summary)
Two overnight attacks on Thursday night’s 1999.00 limit-down continue to delay its inevitable retest. That is optimism, which is potentially bearish from a contrarian perspective.
Meanwhile, the overnight interim bounce formed downtrending pivotal resistance that intersects with the open around 2013.00. Holding its test — preferably, already reacting down by then — would target fresh lows. Recovering it through 9:45, and preferably also 2016.75, could avoid triggering the bias-down. For now.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Round-two.
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…
Understatement of the decade: Friday’s open gapped down sharply. But its 2031.50 opening print was well above the overnight limit-down at 1999.00. Rallying through the first half-hour attacked 2065.00, then the balance of the session trended back down. The final hour’s blip-down under the open’s low to 2022.25 reacted up stunningly to 2040.00. Even more stunningly, the cash session’s last 10 minutes were reversed down to 2026.50, extending to fresh lows at 2016.25.
Overnight action’s new info…
Sunday night’s open gapped down to 2014.00 and slide further to 2001.50. Flat-to-higher ignored China devaluing the Yuan again, soon firming back up to the opening print. And then through it, overlapping Friday afternoon’s cash session low by 2 points. Firming through Europe’s opens touched 2022.50 and has reversed down since then, now testing 2005.00 .
If, then…
Thursday night’s 1999.00 limit-down halt requires a retest, probably down to 1993.50, with further potential down to 1980.00. There’s not much time available to isolate the fresh lows by satisfying the retest and already recovering into positive territory pre-open. Not isolating fresh lows would be trickier to form a trading low this morning, with a negative close today confirming a trend change.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2004.50 would be likely also to exceed the 2008.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open under 2013.25 would be likely at least to trigger the 2018.75 bias-down signal.