Posts by Rod David
Look ahead: Economic Calendar – for Wed Feb 25 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
It”s day-two of the Fed Chair”s semi-annual Humphrey-Hawkins testimony. This is where the opportunity lies. Anticipating a similar opening statement as Tuesday, the reaction to Yellen”s remarks tends to be discounted at Wednesday”s open. In fact, the second day”s remarks tend to massage any undesired reaction to the first day. In any case, the first day”s remarks tend to be fully discounted, setting a risk limit.
MBA Purchase Applications
7:00 AM ET
New Home Sales
10:00 AM ET
**Janet Yellen H-H House hawkins
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2117.75 | 2115.25 |
| …would target | 2123.50 | 2121.25 |
| Bias-down: under | 2109.00 | 2106.75 |
| …would target | 2104.00 | 2101.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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.
If at first, second, or third…
Perseverance preserves the breakout.
The bias timing window”s three tests of its 2108.50 bias-up signal all held. No-bias triggered at 10:15. But then it was invalidated by being exceeded through 10:30.
The 2114.00 bias-up target wasn”t triggered, but another target within 1 tick was put into play. Both have been tested. Potential to 2115.75 remains alive so long as pullback limits hold, currently 2112.75.
Regardless, overbought RSI at the high requires its retest.
Not yet invalidating the pullback limit, and the outstanding overbought RSI, both undermine sellers. Also invalidating sellers is still probing prior highs as the bias environment begins lapsing.
Entering the noon hour back under 2108.50 would still likely reverse the trend down. But entering the noon hour under 2108.50 is increasingly unlikely. The breakout”s origin prevents any extension from marginalizing sellers, so an afternoon reversal setup would be identified, too…
…Assuming the noon hour”s entry isn”t already reversing down.
Post-open review
Bumpy ride visiting both extremes.
The 2108.50 bias-up signal didn”t trigger. The grace period was almost invoked, touching the bias-up signal within 1 minute of being within 3 minutes of the 10:15 trigger, and then within 1 tick within those 3 minutes. Neither condition qualifies for invoking the grace period.
But regardless of invoking the grace period, later exceeding the bias-up signal through 10:30 can still invalidate the 10:15 signal. In fact, fresh highs up to 2111.75 did just that. The no-bias signal is invalidated.
Being invalidated, the 2114.50 bias-up target isn”t necessarily in-play. It won”t become “unfinished business above” if not yet met when the bias environment begins lapsing at 11:30. But 2113.75 and potentially 2115.25 are in-play according to the opening swing”s measurements.
Describing the tortured test of the bias-up signal should acknowledge its earlier reaction down that was sparked by Yellen”s remarks. The drop wasn”t arbitrary, coming to within 1 tick of the 2102.50 bias-down signal. Almost all available selling pressure was expended without gaining any traction for the effort. Buyers were almost fully refueled. If they can”t maintain this probe of new highs, then they”re done.
So, the origin of trending up above prior highs requires entering the noon hour above prior highs. The alternative would reverse the trend back down intraday.
Tuesday”s pre-open Market Tour finds
Tuesday”s pre-open Market Tour finds a narrowly ranging market just itching to break out of its range AND die trying:
https://roddavid10.mitel-nhwc.com/join/zvsfsmx