Posts by Rod David
Look ahead: Economic Calendar – for Tue Dec 29, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s 5-year auction might be affected by the Consumer Confidence report’s reaction. That reaction might be foreshadowed by either pre-open report’s reaction. The market is getting more sensitive to reports again, now that rates are malleable.
International Trade in Goods
8:30 AM ET
Redbook
8:55 AM ET
S&P Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2051.50 | 2043.25 |
| …would target | 2056.50 | 2048.50 |
| Bias-down: under | 2045.75 | 2037.50 |
| …would target | 2040.25 | 2032.00 |
| Signal status: 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… Extreme sentiment got extremer.
Post-open recovery stops short.
Of two bullish paths, one was disqualified by the pre-open bounce to 2045.50. It required at least attacking the 2041.50 bias-down target, if not actually retesting it.
The post-open dip did retest it, and recovered to within 1 tick of the 2047.00 bias-down signal. Resisting its approach was expected, and so was the potential for its reaction down not holding corrective limits.
Corrective pullback limits didn’t hold. The reaction down extended through the 2040.25 overnight low to 2037.75. The 2041.50 bias-down target’s break through 10:15 renewed the bias-down signal.
RSIs diverged positively at the low, enabling a 3-point bounce. It has room up to 2041.75 or 2043.25 before suggesting an actual recovery underway. Meanwhile, back under 2038.75 would start to signal the drop was extending to 2034.25 and potentially 2032.00.
Pre-market Tour (recording & summary)
Overnight selling pressure has been extreme, as considered by two characteristics: Its decline has been relentless in only trending down, and its production has been substantial in already testing the 2041.50 bias-down target.
Exiting the weekend with extreme sentiment is often a sentiment extreme. There’s already a bounce from 2040.25 testing 2045.50. That might allow a post-open dip to retest the bias-down target before resuming the recovery, but it’s not necessary.
Extreme sentiment can extend post-open. Not holding the bias-down target would renew the bias-down signal, so be careful considering whether to buy a post-open dip that hasn’t yet started recovering.
Details and other markets coverage are discussed in the pre-market Tour recording here:
https://roddavid10.mitel-nhwc.com/join/kfyhytj
The First Trade… Post-Christmas markdown.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Christmas Eve’s early close spent the morning ranging choppily sideways under Wednesday’s 2057.50 highs. Breaking higher into the noon hour attacked 2060.00. The last half-hour plunged to probe under the morning’s 2050.50 low.
Overnight action’s new info…
Sunday night’s open surged briefly to 2054.50, and then began retracing entirely back down to 2050.50. And through it, recently probing fresh lows down to 2043.25.
If, then…
Exiting the weekend with extreme sentiment is often a sentiment extreme. Monday’s open is indicated currently beyond the prior session’s range, attacking Wednesday morning’s lows. Probing today back above Thursday’s will be difficult without opening back above Thursday’s 2051.50 low. Meanwhile, trending down this morning would be difficult if the bias-down signal isn’t renewed under 2041.50.
First Trade…
Exiting the open at 9:45 under 2045.50 would be likely to trigger the 2047.00 bias-down signal at 10:15. Exiting the open under 2038.00 would be likely to renew the bias-down signal by not recovering the 2041.50 bias-down target at 10:15.