Posts by Rod David
Look ahead: Economic Calendar – for Fri Jan 29, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The overnight policy statement from BOJ can influence price action. The pre-open GDP report is high-profile, but is actually unlikely to influence price action. The PMI number’s reaction when released privately to institutional subscribers tends to extend when released publicly. The afternoon’s Fed speaker might catch the market unaware.
Bank of Japan policy statement
time unknown
GDP
8:30 AM ET
International Trade in Goods
8:30 AM ET
Employment Cost Index
8:30 AM ET
*Chicago PMI
9:45 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*John Williams Speaks
2:45 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1894.50 | 1887.50 |
| …would target | 1899.75 | 1893.00 |
| Bias-down: under | 1875.00 | 1868.25 |
| …would target | 1869.75 | 1862.75 |
| 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… It just gets wider.
Overshadowing the choppy overnight range.
The pre-open surge to 1902.00 had retraced to greet the open at 1892.00. Rather than improve, the gap up narrowed to test 1887.50. Reacting up couldn’t get past the opening range before headlines triggered a deeper drop.
And having rejected tests of both bias-up parameters, offsetting tests of the bias-down parameters were put into play.
The rejection came late, as still overlapping the 1882.00 bias-up signal at 10:15 invoked the grace period. Only the 1869.25 bias-down signal’s test is required. The 1862.75 bias-down target’s test won’t become “unfinished business below” if left outstanding.
And it might be left outstanding. The bias-down signal was tested down to 1866.00. Filling the gap back to yesterday’s close and testing the overnight low has reacted up to within 6 ticks of 1887.50.
Back under 1879.25 would start to signal the bounce had failed. But exiting the bias environment back above its 1887.50 bias-up target could resume the overnight recovery — recoveries — this time without hesitation before testing 1913.00.
Pre-market Tour (recording & summary)
The overnight rally to 1896.00 had been retraced back down through 1887.50 and 1882.00 to 1873.00. Threatening to resume yesterday afternoon’s drop was countered by RSIs diverging positively. And now another bounce to 1882.00 has recovered to attack 1896.00 again.
The upside potential includes fresh highs testing 1913.00. I’ll only consider buy signals until some other setup were to suggest that 1892.00 and 1887.50 won’t hold as support. The consequence to failing this second recovery attempt would likely probe fresh lows down to 1859.50.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Recovery denied.
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…
Wednesday’s bias-down environment began lapsing at its 1897.50 bias-down signal, and immediately launched a rally into the noon hour’s 1910.00 high. A pre-FOMC pullback to 1899.50 tried recovering. But its 10-point knee-jerk reaction up was reversed back down to test 1887.50. That soon extended much lower to 1865.00, ranging around 1873.00-1874.75 through the close.
Overnight action’s new info…
Quite the round trip. Holding 1873.00-1874.75 had created bounce potential up to 1982.00, which was fulfilled soon after the Globex open. Its reaction attacked 1966.00, and then rallied through Europe’s opens to attack 1896.00. Dipping from there fell back to 1882.00. And now plunging from there is testing 1873.00-1874.75.
If, then…
Yesterday afternoon’s decline had gained traction that made it likely to extend lower this morning, but we discussed two reasons to anticipate its rejection. Confidence in the rejection depends at least upon recovering 1882.00 and 1887.50, which would put 1913.00 back in-play. But fulfilling yesterday’s late 1882.00 bounce has allowed another downleg to 1859.50… and that has become likelier with the drop back to 1873.00-1874.75.
First Trade…
Exiting the open at 9:45 under 1874.75 would be unlikely to trigger the 1882.00 bias-up signal at 10:15. Exiting the open above 1885.00 would be likely to trigger bias-up.