Posts by Rod David
Look ahead: Economic Calendar – for Wed Mar 7, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: A bevvy of Fed speakers litter the road into and out of Wednesday’s pre-open ADP report, which is both high-profile and reliably influential to price action. Bank of Canada will issue a policy statement. And the afternoon’s Beige Book may inhibit volatility before its release..
Lael Brainard Speaks
TUE 7:00 PM ET
Robert Kaplan Speaks
TUE 8:30 PM ET
MBA Mortgage Applications
7:00 AM ET
*William Dudley Speaks
7:30 AM ET
*Raphael Bostic Speaks
8:00 AM ET
*ADP Employment Report
8:15 AM ET
*William Dudley Speaks
8:20 AM ET
International Trade
8:30 AM ET
Productivity and Costs
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Beige Book
2:00 PM ET
Consumer Credit
3:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2723.50 | 2723.00 |
| …would target | 2731.00 | 2730.75 |
| Bias-down: under | 2714.25 | 2713.75 |
| …would target | 2705.00 | 2704.75 |
| 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… Too soon?
Overnight highs retraced to unchanged.
The bearish template for today is a recognition of the rally being intact. This may prove to be a temporary correction, but its series of higher highs and higher lows was maintained through yesterday’s close. Yesterday’s peak met and held the correction’s 2727.75 limit, but it
wasn’t rejected by reversing down into the close.
So, reversing down could be done either by rejecting probes above yesterday’s highs, or else already gapping down. Overnight news produced a probe above yesterday’s highs up to 2734.50, which the open retraced — first to 2720.00 and then to 2717.50. The 2727.75 bias-up signal didn’t trigger.
And still the series of higher highs and higher lows remains intact.
More so, the retracement filled the gap back to yesterday’s close. And held it, through the open. That was the time for sellers to have broken under the prior close, or to have delayed testing it at all. Testing it and holding it through a relevant window like the open undermines sellers. In fact, an 11-point bounce just tested 2727.75 as resistance (too late to trigger, or to invalidate that it didn’t trigger).
Even if we knew with 100% certainty an offsetting test of the 2704.75 bias-down signal will be fulfilled today, the path there is not assured. This bounce up to 2727.75 could extend to 2731.00-2732.00. Back under 2723.00 first would start to signal another downleg underway already.
The First Trade & Pre-open Tour Recording… Blipping-up.
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…
Sunday night’s choppy ranging had developed exclusively in negative territory, back-and-forth within Friday’s late surge, and below it down to 2664.00. Monday’s first hour was less adventuresome, ranging even more narrowly. But at the last possible minute a Dry Cleaners morning signal was avoided by surging back to unchanged at 2690.00, and through it to test the morning’s 2699.00 bias-up signal. Extending higher into and out of the noon hour eventually tested the 2725.25-2727.75 corrective bounce peak described during this weekend’s Saturday Review. The close drifted down to 2717.00.
Overnight action’s new info…
In a throwback to the golden years of two months ago, an unusual 5-point wide range was maintained for hours. Yesterday’s late pullback to 2717.00 held throughout, resolving up to greet Europe’s opens attacking 2727.75. Another 5-point consolidation was resolved more aggressively by surging to 2734.50. Its reaction has dipped back down to 2727.75.
If, then…
Overnight support was apparently a function of last week’s tariffs losing credibility. Overnight gains are apparently a function of a North Korea disarmament talks overture. Whatever the story behind it, this price action is consistent with the bearish scenario of probing yesterday’s highs before failing — whether probing higher this morning and failing this afternoon, or already failing through the open. The bullish scenario departs from the bearish scenario by not rejecting the higher probes. Negotiating the range between yesterday’s close and its highs at 2718.00-2728.00 could be the difference between rallying and reversing.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2725.25 would be unlikely to trigger the 2727.75 bias-up signal at 10:15.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2728.50 | 2727.75 |
| …would target | 2737.00 | 2736.50 |
| Bias-down: under | 2705.25 | 2704.75 |
| …would target | 2694.50 | 2693.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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.