Posts by Rod David
Look ahead: Economic Calendar – for Fri May 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is unusually busy for a Friday, especially ahead of a 3-day holiday weekend. And not only busy, but with both high-profile and influential reports, and several Fed speakers.
*Durable Goods Orders
8:30 AM ET
*Jerome Powell Speaks
9:20 AM ET
*Consumer Sentiment
10:00 AM ET
*Raphael Bostic Speaks
11:45 AM ET
*Robert Kaplan Speaks
11:45 AM ET
*Charles Evans Speaks
11:45 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2726.50 | 2725.25 |
| …would target | 2733.25 | 2732.00 |
| Bias-down: under | 2716.00 | 2715.00 |
| …would target | 2709.50 | 2708.50 |
| Signal status: BIAS-UP | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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… Rolling over with the punches.
Non-market headline kills recovery.
This morning was likely to probe above yesterday’s 2733.00 high. So long as overnight action had not already the trend down, and so long as any pre-open dip was recoverable, 
some upside follow-through was all but obligatory. “Some” upside follow-through, meaning that it would be either durable or rejected.
Already retracing 61.8% of the overnight dip’s recovery down to 2725.25 was constructive. Fresh highs would have been more durable, but still vulnerable to reversing down. Already, 2730.50 was being tested just 2 minutes away from exiting the opening 15 minutes of volatility.
Then came the headline cancelling the N. Korea meeting. The knee-jerk reaction down to 2722.00 was extended by a plunge to 2714.00. Its reaction up barely touched the 2720.75 bias-down signal as resistance, and held it in time to trigger.
This drop’s catalyst is artificial. It crowds out what could have been organic selling from patient sellers awaiting those obligatory fresh highs. So, the question now is which path follows: Will the drop attract enough speculative buyers exploiting the non-market related price discount, or is the drop so deep that patient sellers have accelerated their plans. The latter could still resolve bullishly, but not soon.
Despite RSIs diverging positively on a retest of 2709.75, a break lower just touched 2706.00. Back above 2712.00 and 2715.50 would start to signal momentum reversing up. Otherwise, exiting the the bias environment under 2711.00 would suggest the bigger decline has already resumed.
The First Trade & Pre-open Tour Recording… Skipping only a heartbeat.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Greeting Wednesday’s open after collapsing overnight stumbled into a choppy morning. The wide 2708.50-2721.25 first swing was followed by 3 narrower, all supported by the overnight low’s base. Then the FOMC Minutes triggered a surge, before the afternoon bias environment had even come within view of lapsing. Tuesday’s closing bounce to 2727.25 was retraced, and extended up to 2733.00. That’s flat with Monday’s close, which was also trying to recover the 2732.00 upper-end of the prior Monday afternoon’s consolidation.
Overnight action’s new info…
Yesterday’s last-minute cash session high had started reacting down into the futures close, equating to 2731.00-2733.00. Globex quickly extended the reaction down further to attack 2720.00, where the direction almost immediately began reversing back up. Trending up both into Europe’s opens (no defensive posturing), and out, was retraced back to yesterday’s 2733.00 high. Its reaction down to 2727.25 is now trying to resume the initial overnight dip’s recovery.
If, then…
Wednesday’s recovery came from an overnight decline. The decline was substantial and poised to be very productive. That might trump the otherwise bullish seasonality of the upcoming 3-day U.S. holiday weekend. It’s not affecting Thursday’s open, but we may be discussing it tomorrow. Not recovering initial weakness through Thursday’s open would still be credible for retracing much or all of Wednesday’s recovery — perhaps even resuming the prior night’s decline. Meanwhile, not posturing defensively ahead of Europe’s opens has departed from the recent pattern. And the departure is being rewarded by extending higher without delay. Probing above yesterday’s highs this morning remains likely, which the seasonal bullishness could exploit for more upside follow-through, unless rejected early similar to Tuesday’s open.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2734.00 would be likely to trigger the 2732.00 bias-up signal at 10:15. Exiting the open under 2730.75 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2732.50 | 2732.00 |
| …would target | 2737.75 | 2737.50 |
| Bias-down: under | 2721.00 | 2720.75 |
| …would target | 2713.00 | 2713.00 |
| Signal status: BIAS-DOWN | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.