Posts by Rod David
Look ahead: Economic Calendar – for Fri Aug 21 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Just one econ report scheduled for Friday, and it has a mixed track record for influencing price action. Of course, everything reported ahead of September”s FOMC meeting will be examined more closely.
*PMI Manufacturing Index Flash
9:45 AM ET
Afternoon bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2061.75 | 2058.25 |
| …would target | 2066.50 | 2063.25 |
| Bias-down: under | 2052.25 | 2049.00 |
| …would target | 2047.00 | 2043.50 |
| Signal status: NOn-BIAS, BIAS-DOWN TARGET MET | 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… Switching horses midstream.
Has expiration jockeying run its course… for now?
The pre-open Head & Shoulders reversal under 2061.00 was expected to become vulnerable to a bounce at 2055.25. Just touching 2055.25 produced a nearly immediate bounce that pierced the pre-open Head & Shoulders” 2064.50 high.
That was just a corrective bounce, and its reaction down triggered a sell signal under 2060.50 putting my 2050.50 objective into play. It was eventually probed by nearly 3 points down to 2047.75.
2047.75 was retested while 1-minute RSI diverged positively. Its reaction up triggered a buy signal above 2050.50 that quickly met its 2056.50 buy signal.
So, three parameters and 21 cumulative points. Does this market need a rest, or is it falling apart? Perhaps a little of both. Exiting this morning”s bias environment at 11:30 in rally mode could extend higher through tomorrow”s open before a bearish WedEX takes control. Otherwise, resuming the decline would next target 2035.00.
And absorbing an expiration opening at new lows would be a tremendous challenge for a recovery to overcome.
Consolidating the overnight plunge to
Consolidating the overnight plunge to 2053.50 had bounced to 2061 while ranging. A break higher to 2064.50 formed a Head & Shoulders that we discussed as the pre-market Tour began, and then watched it break lower as the Tour ended. A probe under the overnight lows remains likely, potentially to 2050.50, before becoming vulnerable to a morning-long bounce. Details and other markets coverage were discussed during the Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/tyfhjxf
The First Trade… Getting deep.
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…
Gapping down Wednesday to 2084.25 extended down 18 points to 2066.50 through the morning”s bias environment. Greeting the prematurely leaked FOMC Minutes from 2077.00 was soon extended 16 points to test 2093.00. But no matter how sizable, that leg had originated during a no-bias environment, requiring its complete retracement. A shallower bounce was retraced back down to 2077.00 into the cash session close, and then down to 2071.50 through the futures close
Overnight action”s new info…
Initially bouncing through midnight to retest 2077.00 was suddenly reversed back down through Wednesday”s late lows to attack Wednesday morning”s lows around 2067.00. Consolidating there through Europe”s opens eventually gave way to a 14-point drop touching 2053.50 — 40 points under yesterday”s high.
If, then…
Yesterday”s gap down attracted new sponsorship after the open to extend the overnight decline. Last night”s drop may be overly-discounting that possibility. Lower lows were likely, and this action is in-line with the recent trend, But tomorrow”s option expiration may be exacerbating the decline as exposure is readjusted en masse. The result need not be a morning rally, but extending down more deeply would be difficult. Meanwhile, gapping down under yesterday”s low can turn yesterday”s WedEX more bearish by proxy.
First Trade…
Exiting the open at 9:45 under 2060.00 would likely not recover the 2062.00 bias-down target through 10:15, thereby renewing the bias-down signal. Exiting the open above 2065.00 would likely hold above the 2062.00 bias-down target through 10:15 to avoid renewing the bias-down signal