Posts by Rod David
Look ahead: Economic Calendar – for Thu Jan 28, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Durable Goods pre-open Thursday has a track record for influencing price action. And that tends to be duplicated by subsequent econ reports. Meanwhile, residual reaction from Wednesday’s FOMC statement should persist.
*Durable Goods Orders
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1912.50 | 1905.50 |
| …would target | 1918.50 | 1911.50 |
| Bias-down: under | 1906.50 | 1899.50 |
| …would target | 1900.25 | 1893.25 |
| 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… Pessimism again.
Opening recovery attempt fails..
Probing above the 1890.00 overnight highs pre-open had reacted down post-open to touch the 1887.50 bias-down signal. It reaction up probed fresh highs up to 1894.25.
And held.
The 1887.50 bias-down signal was probed in reaction to the 10:00 econ report. That extended sharply to test the 1881.00 bias-down target by 10:15.
And held.
This is a bias-down environment whose target has been met. Usually, that establishes the morning’s floor. But not renewing the bias-down by 10:15 doesn’t prevent probing under its target after 10:15. This is, after all, a bias-down environment.
Meanwhile, retesting 1881.00 has produced a bounce up to 1889.50. That’s above the 1887.50 bias-down signal, which should define the the bias environment’s upper-end, until approaching its 11:30 exit.
Pre-market Tour (recording & summary)
The overnight range is improving ahead of the open. Fresh highs are now only 3-4 points under yesterday’s 1896.00 close, which is a 2-3 point improvement from the overnight range.
It’s also above the 1887.50 bias-down signal. Testing it intraday and holding its test would put into play an offsetting test of the 1898.00 bias-up signal.
At least retesting yesterday’s highs is still likely even if bias-down isn’t first tested and rejected, but we wouldn’t have the confidence of it being required. Similarly, triggering bias-down would likely retest overnight lows.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… A pause between dropping shoes.
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…
Gapping up to 1881.00 had extended higher through the noon hour to attack 1900.00. That was pessimistically short of Friday’s prior highs. Dipping to 1888.00 was recovered only to 1897.25 before the close, and only momentarily as 1888.00 was retraced through the futures close… before AAPL’s earnings.
Overnight action’s new info…
Reaction to AAPL’s earnings triggered a gap down to 1885.00 that extended immediately to attack 1881.00. Price action since then has ranged choppily sideways — testing 1890.00 above and 1879.00 below — all centered around 1885.00. Currently a bounce is testing 1887.50.
If, then…
With no trending effort having been made yesterday afternoon, it’s not surprising that no traction was gained either way. So, gapping open beyond the afternoon’s range can be the only way to launch trending for the morning. Both gapping open AND extending through the open. Gapping but NOT extending would more likely return into the range. That setup can at least resemble trending, attracting price back to yesterday’s highs. Trending beyond the range this morning is more difficult with this afternoon’s FOMC policy statement looming ahead.
First Trade…
Exiting the open at 9:45 under 1885.00 would be likely to trigger the 1887.50 bias-down signal. Exiting the open above 1892.00 would be unlikely to trigger bias-down.