Posts by Rod David
Look ahead: Economic Calendar – for Thu Jan 14, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s 30-year auction is likely to inhibit price action ahead of it, and then see a reaction to the auction’s results. The morning’s BOE announcement and Fed speaker are likely to influence price action, too.
Bank of England policy statement
7:00 AM ET
*James Bullard Speaks
8:15 AM ET
Jobless Claims
8:30 AM ET
Import and Export Prices
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond 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 | 1934.25 | 1927.25 |
| …would target | 1940.25 | 1933.50 |
| Bias-down: under | 1922.25 | 1915.50 |
| …would target | 1914.75 | 1907.75 |
| Signal status: BIAS-DOWN | 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… Still conditioning early buyers?
The least likely scenario is playing out.
Gapping up above 1938.00 tried extending higher. For awhile. But bounces to 1942.00-1943.00 kept overlapping 1938.00. Stretching the rubber back down to the 1933.50 bias-up signal’s support helped. But only momentarily — bouncing to 1938.00 held as resistance.
Eventually triggering late no-bias, after testing both bias-up parameters, has put into play offsetting tests of both bias-down parameters. The 1926.50 bias-down signal has been tested down to 1923.00.
The 1921.50 bias-down target remains in-play. I’m skeptical.
1921.50 requires probing negative territory. That’s not likely after the gap up from yesterday upside traction didn’t invert by 9:45. Anyway, a late bias signal is less reliable than a timely signal.
Exiting the bias environment above 1933.50 — and preferably also above 1938.00-1938.99 would be likely to trend higher through the afternoon. Exiting the bias environment under 1921.50 would be credible for extending down, anyway.
Pre-market Tour (recording & summary)
The overnight dip from 1946.50 eventually extended down to 1932.50. That is a test of 1933.50 as support, which had been the objective of yesterday afternoon’s short-squeeze setup.
Its reaction up attacked 1944.00, still leaving enough time for another dip. That dip is testing 1938.00 as support, which had been significant resistance to yesterday morning’s gap up.
The dips and their reactions help to identify a pullback limit at 1936.00-1937.00. Opening any higher — or, at least holding 1936.00-1937.00 as support of a post-open dip — would be much more vulnerable to resuming the rally. The next higher objective remains 1948.00.
Back under 1936.00-1937.00 would start to suggest the rally signal is inverting for the morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Carving out higher highs.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK <<==click here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Optimism schooling was back in session. Gapping up Tuesday to test 1938.00 had reversed down enough and in time to avoid triggering the 1927.25 bias-up signal. Dipping deeper through the noon hour targeted 1912.00 and 1907.00, and probed an extra point lower. Entering the noon hour at fresh afternoon highs triggered a short-squeeze that extended up to 1935.00.
Overnight action’s new info…
Capture of US sailors triggered a reaction down to 1922.00 into the Globex open. But that was soon on its way to recovery, attacking 1943.00. Its reaction recovered briefly to probe fresh highs up to 1946.50. That’s reacting back down now to attack 1936.00 as support.
If, then…
Yesterday afternoon’s rally gained traction, which this morning should reward by probing higher during the morning. Already probing higher overnight might seem to confirm, but it also risks already fulfilling the higher probe — especially having come so close to the next higher objective at 1948.00. That should be tested, and potentially also 1975.00, so long as the open doesn’t probe into negative territory too deeply or for too long.
First Trade…
Exiting the open at 9:45 above 1941.50 would be likely also to renew the bias-up signal by exceeding the 1939.00 bias-up target at 10:15. Exiting the open under 1931.00 would be unlikely to trigger the 1933.50 bias-up signal.