Posts by Rod David
Look ahead: Economic Calendar – for Mon Feb 29, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s PMI is reliable for influencing price action. Note that it is first released privately to its institutional subscribers. That release’s market reaction tends to be repeated when released publicly.
*Chicago PMI
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Farm Prices
3:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1958.50 | 1955.75 |
| …would target | 1965.75 | 1962.00 |
| Bias-down: under | 1948.75 | 1946.00 |
| …would target | 1943.00 | 1940.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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… Tough get. Tougher give.
Overnight rally retraces entire excess.
1946.00 was the minimum objective to retesting Monday’s highs, potentially to 1952.00-1953.00. That potential became likelier as reward for recovering from a deeper and more prolonged pullback. In fact, it was relevant resistance when attacked overnight. And its eventual break launched a rally to sharply higher highs at 1968.75.
But only momentarily. The reaction down from 1968.75 still held up enough to gap up at 1960.00. But trending down from there has touched yesterday’s 1949.50 high.
1949.50 happens also to be yesterday’s cash session close equivalent, which is natural support. While 3-minute RSI made a higher oversold low, 1-minute RSI diverged positively. And now a bounce is testing 1955.00.
A bigger bounce would target 1962.75, while filling the open’s 1960.00. gap. Holding its test and closing negative would seal a top. Meanwhile, this morning’s noN-bias signal has no objective of its own.
Pre-market Tour (recording & summary)
The overnight rally’s extension above 1952.00-1953.00 to 1968.75 was retraced by 61.8% down to 1957.00. Recovering it up to 1966.00 has reacted back down almost entirely to 1958.50.
Gapping up doesn’t prevent trending straight down from the open. But not already retracing the open’s gap by 9:45 could all but marginalize sellers for the day.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Oh, what a night.
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…
Surging momentarily at Thursday’s open was followed by consolidation through the morning and noon hour. The afternoon bias environment finally broke out of the funk to fill the gap back to Monday’s 1942.00 cash session closing equivalent. The final hour surged into and out of the futures close to within 2 ticks of its potential to 1952.00-1953.00.
Overnight action’s new info…
Ranging narrowly flat-to-higher repeatedly attacked 1953.00 closer and closer. Its break was underway already into Europe’s opens. And it kept going, rallying along with Crude Oil to attack 1969.00.
If, then…
The rally’s good news is that it’s unlikely to end today. Sliding immediately and relentlessly would leave a gap outstanding at the open. The rally’s bad news is that it’s vulnerable to sliding immediately and relentlessly. Testing 1952.00-1953.00 need not peak there, although it did until Europe’s opens approached. Without a consolidation above 1952.00-1953.00 there is no requirement to recover its eventual reaction down. And not much motivation, not ahead of two days of illiquidity careening into a 2-day, 82-point rally. The rally’s nightmare would be to open well under the overnight high, making its gap easier to fill sooner, with plenty of time to attract counter-trend sponsorship.
First Trade…
Exiting the open at 9:45 above 1959.50 would be likely also to exceed the 1958.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1956.50 would be unlikely to exceed the bias-up target at 10:15.