Posts by Rod David
Look ahead: Economic Calendar – for Thu Feb 26 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
I”ve assigned two asterisks to Bullard”s scheduled CNBC appearance because of the storied timing to his comments that enabled a drop to bottom, triggering a massive sharp rally. I wouldn”t pigeon-hole him as a bottom-maker, when market-turner might be more appropriate. Both CPI and Durable Goods are high-profile, with reliable track records for influencing price action. Another Fed speaker keeps the noon hour lively.
**James Bullard on CNBC
morning
*Consumer Price Index
8:30 AM ET
*Durable Goods Orders
8:30 AM ET
Jobless Claims
8:30 AM ET
FHFA House Price Index
9:00 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
*Dennis Lockhart Speaks
12:40 PM 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 | 2117.50 | 2115.25 |
| …would target | 2124.25 | 2122.00 |
| Bias-down: under | 2111.50 | 2109.25 |
| …would target | 2105.50 | 2103.25 |
| Signal status: NO-BIAS | 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
Sellers stymied.
Extending the relentless overnight decline required breaking under its low at a steeper slope. Despite a 1-point blip-up from the 2111.75 open, the 2110.00 overnight low was soon probed by more than 1 point.
But the 2111.75 open was retested. And it wasn”t quite rejected after the 10:00 news, let alone by 10:15.
Neither bias signal was tested or triggered, and neither bias signal requires an offsetting test. Sellers didn”t maintain their aggression, but neither were they rejected.
Sellers aren”t likely to launch a durable drop, but could still produce fresh lows, perhaps testing the 2107.25 bias-down signal. A rally has potential up to the 2115.25 bias-up signal. But without being likely to trend this morning at all, waiting patientialy to trade a trending attempt may be more productive.
The overnight relentless drop isn”t
The overnight relentless drop isn”t very deep, and it remains above yesterday”s prior lows. Is the rally temporarily paralyzed by anxiousness before day-two of the Fed Chair”s congressional testimony? We discussed that during the pre-open Market Tour:
https://roddavid10.mitel-nhwc.com/join/kfpvycm
The First Trade.
Proper context can start the day with a solid win and make all the difference.
Enter the Chartroom here (pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Tuesday”s open had initially been resisted by its 2108.50 bias-up signal, which was also the prior high. Breaking above it before the first hour ended was rewarded by a new high testing the morning”s 2114.00 bias-up target. After the noon hour”s momentary probe back under prior highs, the afternoon”s higher high at 2115.25 fulfilled the session”s highest calculable target. The rally didn”t gain traction despite spending so much time probing new highs, because the close had dipped to overlap the morning”s high.
Overnight action”s new info…
Tuesday”s closing dip continued dipping, most recently touching 2110.00 amid Germany-second-guessing-Greece headlines.
If, then…
Most or all relevant time Tuesday was spent above prior highs, without gaining traction for the effort. This was the current rally leg”s first instance of these conditions. If they were more pronounced without any intraday dip under prior highs, a reversal down would be imminent. Instead, a second occurrence of these conditions within 2-3 days is still needed. Interim trending should be muted, or else a much bigger rally leg would actually be underway.
First Trade…
Exiting the open at 9:45 under 2104.25 would be likely also to trigger the 2107.25 bias-down signal at 10:15. Exiting the open under 2109.00 would at least be unlikely to recover in time to trigger bias-up.