Posts by Rod David
Look ahead: Economic Calendar – for Tue May 15, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is busy, and has some high-profile reports. But none is reliable for influencing price action without it also being very much a surprise compared to expectations. If there were any noticeable reaction to the pre-open reports, then post-open reports would be likely to duplicate it.
Retail Sales
8:30 AM ET
Empire State Mfg Survey
8:30 AM ET
Redbook
8:55 AM ET
Business Inventories
10:00 AM ET
Housing Market Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
*John Williams Speaks
1:10 PM ET
Treasury International Capital
4:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2740.25 | 2739.25 |
| …would target | 2748.25 | 2747.25 |
| Bias-down: under | 2731.25 | 2730.50 |
| …would target | 2722.25 | 2721.50 |
| Signal status: BIAS-DOWN | FAQ | |
| Flowcharts: Bias-UP // Bias-DN 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… Holding up.
Target met, held, but not rejected.
The overnight pullback from 2741.00 ultimately extended down to pierce 2733.00 by 3 ticks before the open.. The open rallied immediately up to 2737.00 and then extended to pierce the 2939.25 bias-up target.
Its reaction down has recovered to a fresh high at 2741.25. It’s too late to renew the bias-up signal, but this is still a bias-up environment. Extending higher would next target 2747.25.
There’s still cause for suspicion about this morning’s rally maintaining its gains — let alone extending higher. The overnight pullback will have to serve by proxy as generating pessimism, in lieu of a deeper pullback under Thursday’s highs. That’s not optimal, but it gets a benefit of the doubt until reversed.
The First Trade & Pre-open Tour Recording… Foreshadowing?
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…
Friday’s gap up and probe of fresh highs was rejected after fulfilling the morning’s 2730.00 bias-up target up to 2732.50. Its reversal probed the open’s 2720.00 low by 1 point during the noon hour. The afternoon bias environment dipped 2-4 points into negative territory to 2716.75. But the trend never reversed down. And the balance of the session rallied 10-13 points up to 2727.00-2730.00. It was the first close above the rally’s 2721.50 target, although it was still being overlapped.
Overnight action’s new info…
Sunday night’s open spiked up to 2736.00, and consolidated briefly down to 2733.50. Gradually firming extended higher to pierce Monday morning’s 2739.25 bias-up target by a couple of ticks. Its 2-point pullback recovered to 2741.00 after midnight, but price action since then has trended back down to 2733.50.
If, then…
Friday’s pullback was relatively shallow to correct the two strong days preceding it. It wasn’t too brief, except that Fridays are already less relevant. So, this leaves the question whether resuming the rally requires a deeper pullback. And a deeper pullback would raise the question whether the rally had ended already, and the deeper pullback is actually the trend reversing down. Avoiding any dip to immediately extend higher can’t afford to hesitate, or else it would be vulnerable — if not likely — to duplicate Friday morning’s temporary rally, but with a more permanent reversal down. Greeting the open in negative territory could mean that last night’s action produced that temporary rally, and has reversed the trend down. Extending the rally depends largely on maintaining excessive optimism.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2737.50 would be likely to trigger the 2733.00 bias-up signal at 10:15. Exiting the open under 2729.75 would be unlikely to trigger bias-up.
Saturday Review’s recording (for 5/12/18) …More up, less down?
Did last week;’s rally accomplish anything more than to retrace the prior week’s decline? Friday’s fresh recovery high close doesn’t answer that, not decisively, so not definitively. Upside follow-through on Monday would be bullish, putting into play several new upside attractions. Reacting down would not immediately dictate the trend reversing down — although plunging immediately in reaction to external news would be likelier to recover, than would a more arduous organic drop. The paths and their inputs are discussed in detail during this week’s Saturday Review. Also, scroll down for links to tactical execution videos that will be available soon in a reference library.
TACTICAL VIDEOS:
Fading a signal || Reaction limit examples || Noon hour head-fake || Headline reaction fade || Fade gap open || Friday false break ||
The following stock requests were reviewed in this order:
HD, AMAT, GWPH, ARNA, IIPR