Posts by Rod David
Look ahead: Economic Calendar – for Mon Mar 21, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Sunday night’s Fed speaker might make influential comments, but he’s not high-profile in his timing. Monday morning’s econ reports are neither. But the noon hour’s speaker should have an impact.
Jeffrey Lacker Speaks
2:45 AM ET
Chicago Fed National Activity Index
8:30 AM ET
Existing Home Sales
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Dennis Lockhart Speaks
12:30 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2050.75 | 2041.00 |
| …would target | 2057.00 | 2047.25 |
| Bias-down: under | 2043.25 | 2033.50 |
| …would target | 2037.00 | 2027.25 |
| Signal status: NO-BIASr | 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… Must. Probe. Higher.
Even sluggish follow-through isn’t preventing higher highs.
Gapping up to and/or through yesterday’s 2036.75 high was the only way to resume the rally this morning, since yesterday afternoon’s buyers gained no traction for their efforts. A pre-open pullback to 2033.00 had recovered to open at 2036.75.
The opening 15 minutes didn’t extend higher but only ranged widely around the 2036.75 prior high. Nevertheless, a pullback to the 2034.50 bias-up signal was recovered to fresh highs at 2040.75. That satisfied the 2039.75 bias-up signal, without exceeding it through 10:15 to renew the bias-up signal.
Back under 2037.25 (being tested now) would be likely to retest the 2034.50 bias-up signal as support. The reaction down could extend into the noon hour. The pullback could test 2031.00 or the 2027.00 overnight low.
A pullback is easier said than done. This is still a bias-up environment. Expiration’s upside bias remains very much intact. And any downdraft’s recovery remains likely by the afternoon’s bullish WedEX.
Pre-market Tour (recording & summary)
I tried to review all of today’s relevant influences. We got to most of them:
- Expiration Quadruple Witch
- Expiration’s opening 15 minute trending
- Wednesday’s confirmed breakout
- Bullish WedEX
- Overnight neutralized attractions
- Yesterday’s rally not gaining traction
- Friday Factors
- Potential new trend high close today
As for the open, triggering bias-up would be given a benefit of the doubt, but meanwhile a morning pullback that doesn’t trigger bias-down is the likelier scenario.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Nipping at yesterday’s highs.
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…
Thursday’s weaker open wasn’t absorbed immediately, requiring a 7-point post-open dip to 2012.00 before proving sellers were losing control. The market caught on to that fact quickly, trending up relentlessly through the afternoon’s bias environment exit to attack 2037.00. Backing-and-filling down to 2031.00-2031.00 left outstanding overbought RSIs remained at the high, and buyers gained no traction for the effort. But Wednesday’s breakout was confirmed.
Overnight action’s new info…
Thursday’s late backing-and-filling was retracing the afternoon’s no-bias trending that had originated from 2027.00 and 2028.50. Ranging choppily down finally touched 2027.00 after firming to 2034.00 through Europe’s opens. The lower low has been more productive, reacting already back to yesterday’s 2036.75 high, neutralizing its attraction above.
If, then…
Extending the rally this morning is unlikely without gapping up. Having the same limitation barely slowed Thursday’s rally and didn’t prevent it retaining the day’s gains. Trading flat-to-lower this morning wouldn’t prevent the afternoon from being influenced by the bullish WedEX, which only signals an upward bias. Triggering bias-down would threaten to invert WedEX to bearish if its target became “unfinished business.”
First Trade…
Exiting the open at 9:45 above 2028.50 would be unlikely to trigger the 2027.00bias-down signal at 10:15. Exiting the open above 2036.75 would be likely to trigger the 2034.50 bias-up signal.