Posts by Rod David
Mid-day Update… Detour done?
Yellen reaction has largely retraced.
The open’s surge had consolidated to form an Ascending Triangle. Room for noise above it up to 2109.00 was touched twice before the noon hour. That firmed a Double Top from the Triangle’s breakout.
And that’s often bearish. The pattern normally resolves by trending back down in multiple legs that take 1-2 timing windows to complete. The decline tends to be recovered.
In fact, reacting down ahead of Yellen’s comments suddenly extended sharply in reaction to her slightly hawkish comments. A 4-1/2 point bounce attacked 2108.00 where another downleg was triggered targeting 2101.50 — and soon fulfilled down to 2099.50.
The downleg has been largely retraced almost as quickly as it had developed. That might be a little too optimistic, barely being 1-2 timing windows past the failed Ascending Triangle. Regardless, back above 2108.00 at any time would resume this morning’s rally, which is still targeting 2110.75. Meanwhile, a little more backing-and-filling can define the afternoon bias environment.
Look ahead: Economic Calendar – for Tue Jun 7, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No high-profile or infuential econ reports are scheduled for Tuesday. It’s actually not a very busy week in this regard, but Tuesday is the least relevant.
Productivity and Costs
8:30 AM ET
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2111.75 | 2110.00 |
| …would target | 2117.50 | 2116.00 |
| Bias-down: under | 2104.50 | 2103.00 |
| …would target | 2098.75 | 2097.00 |
| Signal status: NO-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… What bad news.
Payrolls and Brexit sellers now fueling the rally.
There were no obstacles to rallying this morning, only potential obstacles of the open reversing back under support or else the bias timing window not triggering bias-up. Now it’s too late for those potential obstacles to form.
Past obstacles were retraced already before the open. Friday’s reaction to the pre-open Employment Situation report and last Tuesday’s reaction to improved Brexit support have resolving in probing fresh highs.
2106.00 was touched just minutes before Friday morning’s plunge. That has been probed this morning up to 2108.25. The 2103.00 bias-up signal triggered, putting into play a test of its 2110.75 bias-up target.
A negative knee-jerk reaction down is possible on Yellen’s noon hour comments — or in anxiousness ahead of them. The 2110.75 bias-up target would become “unfinished business above” if not met this morning.
Pre-market Tour (recording & summary)
Europe’s opens had triggered a 7-1/2 point surge to attack this morning’s 2103.00 bias-up signal. Its reaction down to 2097.50 has recovered to higher highs at 2104.25. Trending up this morning is entirely credible, just needing to make it past the open without reversing back under support, at least triggering bias-up at 10:15. Anxiousness ahead of this afternoon’s Yellen appearances may try to paralyze the rally effort, which would allow one more detour down.
Details and other markets coverage are discussed in the pre-market Tour recording here.