Posts by Rod David
Look ahead: Economic Calendar – for Wed Jun 1, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s econ calendar is busy. Being the week for monthly payrolls, the ADP report gives a chance to fine-tune market sentiment ahead of the number. The post-open ISM report has a track record for influencing price action. As does the afternoon’s Beige Book report, especially in this rate hike talk environment.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
Redbook
8:55 AM ET
PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
*Beige Book
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2099.25 | 2097.00 |
| …would target | 2104.50 | 2102.25 |
| Bias-down: under | 2093.50 | 2091.25 |
| …would target | 2087.75 | 2085.50 |
| 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… Good to the last drop.
Congested open capitulates to sellers.
The 2101.00 bias-up signal was touched twice before the open. The open’s reaction down pierced its 2098.25 pullback limit by 3 ticks. Recovering to retest 2101.00 never attracted new sponsorship to trigger bias-up.
Actually…
…still overlapping the signal at 10:15 AND at 10:30 triggered noN-bias. Not a bias-up putting into play its target. Not a no-bias putting into play an offsetting test of the bias-down signal. But noN-bias that has no predictive value.
That said…
…improving sentiment toward Brexit triggered a knee-jerk reaction down that tested the 2096.25 bias-down signal. Testing and retesting it has only overlapped it, while violating its bounce limit.
Back above 2098.25 would start to signal momentum reversing up. The plunge’s sponsorship is by definition weak-handed, its catalyst having been a headline. The plunge’s origin was congestion, a setup that is typically retraced, regardless of how that then resolves.
Meanwhile, another dip under 2096.25 would be credible for extending down, anyway. Its potential would be the 2091.25 bias-down target.
Pre-market Tour (recording & summary)
The overnight dip held a test of what is this morning’s 2096.25 bias-down signal. Its reaction has touched the 2101.00 bias-up signal. Spreads between the two signals are relatively narrow this morning due to the narrow overnight Globex range. But triggering bias-up has more potential to extend than does triggering bias-down.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Biding time.
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…
Friday’s open immediately resumed Thursday afternoon’s rally. The 2090.00 open extended to 2095.50 by noon. Yellen’s comments produced the negative knee-jerk reaction and its retest that was expected to launch a recovery. The 6-point pullback to the opening print had stretched the rubber band to launch an 8-point rally through the close. All but 1 tick of the potential to 2097.00-2098.00 was fulfilled.
Overnight action’s new info…
Friday afternoon’s rally resumed immediately Sunday night, trending up to 2103.75 by midnight. Drifting to as low as 2099.50 never got any more volatile before the holiday’s Globex close. But Monday night’s Globex session extended the pullback to 2098.00 and then more recently to 2096.00. Its reaction up is probing back above Friday’s late highs.
If, then…
Complexity during Sunday night’s probe of fresh highs created a “new Globex trend extreme” that requires intraday retest, often the same day. It touched the six-week old 2101.00-2102.00 Apr 19 pivotal high, which tends to require extending to test the 2108.00-2109.00 Apr 20 actual high. Resuming the rally this morning might not be necessary for keeping intact the relatively steep trajectory that has been expected for this leg. But any pullback should be confined to the morning’s bias environment to avoid signaling a deeper detour.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2098.00 would be unlikely to trigger the 2101.00 bias-up signal at 10:15. Exiting the open above 2103.00 would be likely to trigger bias-up. Exiting the open under 2093.00 would be likely to trigger the 2091.25 bias-down signal.