Posts by Rod David
Look ahead: Economic Calendar – for Tue Jan 23, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The annual earnings onslaught is in full swing Tuesday, with about 50 high-profile companies reporting. No econ reports will be competing for attention, although the Bank of Japan policy statement could set the tone.
Redbook
8:55 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2820.75 | 2822.50 |
| …would target | 2825.25 | 2827.25 |
| Bias-down: under | 2815.25 | 2817.25 |
| …would target | 2809.50 | 2811.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | FAQ | |
| NEW! 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… Best laid plans.
Retail selling offset by resolution rumors.
Our premise was that negative knee-jerk reactions to the weekend’s government shutdown would keep this morning under pressure. Last night’s gap down to the 2803.75 bias-down signal all but affirmed the expectation. 
A pre-open surge to 2812.00 only returned to unchanged, attacking the bias-up signal to within 2-3 ticks. Anyway, it reacted back down 4-1/2 points, presumably preparing for all of that retail selling pressure.
Which never appeared. Or, if they did, retail sellers were overwhelmed by buying in reaction to favorable headlines of resolving the shutdown today.
The nearest inflection point to consider fading was 2811.25, with a stop or stop-and-reverse to long above the 2812.50 bias-up signal. Working through it eventually formed a detached bar that required an immediate resolution. That resolution was up, and Friday’s 2815.00 high was soon retested. And soon exceeded.
Bias-up was not renewed because this morning’s 2819.50 bias-up target was only being overlapped at 10:15. But this is still a bias-up environment. It has been exceeded anyway to 2822.50, and the next higher objective is 2824.50. Back under 2818.50 would signal a reversal underway, albeit limited to the 2812.50 bias-up signal.
The First Trade & Pre-open Tour Recording… Be wary the obvious.
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…
Thursday night had initially probed under the intraday low, testing support at 2792.00. Reversing up to 2806.00 was retraced 10 points down to 2796.00 before Friday’s open. That’s a lot of volatility. Friday’s expiration open continued the volatility by surging to 2808.00 and then swinging a couple of times down to 2801.00 and lower. Then, as is typical of Friday afternoons, volatility disappeared through the noon hour and most of the bias environment. But the balance of the session resumed the rally to new highs up to 2815.00.
Overnight action’s new info…
We discussed during this weekend’s Saturday Review that buyers would all but disappear ahead of Monday’s open. Nervous retail sellers are likely to flood Monday’s open in their first opportunity to react to the government shutdown. Sunday night’s open gapped down to what is this morning’s 2803.75 bias-down signal, and extended immediately to 2802.00. Immediately, but also briefly, bouncing almost as quickly back up to 2809.00 and later briefly 2810.50. Eventually dipping back down to 2806.00 has reacted up again.
If, then…
The open is likely to downtick from the retail crowd’s selling pressure. Its arrival is obvious, so the question is whether it’s quickly absorbed, or extended. Extending down through the opening 15 minutes of volatility, would get every benefit of the doubt for extending into the noon hour as if the bearish WedEX were influential. Friday afternoon’s bearish WedEX influence wasn’t obvious, if it existed at all. The signal did not invert, and may as well be considered invalidated — except that it still provides a template for trending down throughout Monday morning. Later, the new trend extreme close on a Friday now requires another eventual new trend extreme close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2805.25 would be unlikely to trigger the 2803.75 bias-down signal at 10:15. Exiting the open under 2809.25 would be unlikely to trigger the 2812.50 bias-down signal.
Saturday Review’s recording (for 1/20/18) …Oh, look. New highs, again.
This will be an interesting week, even if the government shutdown is resolved before Monday’s open — and especially if it is! But the market has more important developments to consider. The annual earnings floodgates open, Bank of Japan and the ECB release policy statements, while the least relevant distraction of all takes place in Davos.
Meanwhile, January continues its string of record highs. More so, it continues its string of intraday rallies. Pullbacks are still likelier to recover than to extend down. We discuss why, and to what degree, during this weekend’s Saturday Review.
The following stock requests were reviewed in this order:
ARNA, IIPR, EVH, FARO, ADSK, CVGW, FB, TSEM, LFUS, GE, BAC, WDC, FDX, MS, C, XXII
CHAT transcript
Rod David: SATURDAY SATURDAY
—————– (01/20/2018 09:25) —————–
ljr: GM
—————– (01/20/2018 09:27) —————–
ljr 2: stocks: updates on EVH, CVGW please (long both)
—————– (01/20/2018 09:30) —————–
ljr 2: FB (gap fill) will watch recording later , thx
Rod David: Welcome to Saturday Review. Please post comments and questions as they occur to you, and I will address them as it becomes possible.
—————– (01/20/2018 09:47) —————–
Bill G: Whats interesting, at the premium of es to cash went from a half point on Tues to around four and a half pts on Fri
Bill G: That was at the intraday highs
—————– (01/20/2018 09:54) —————–
David B: was the pending gov’t shutdown possible holding the market back and then market thought at the end of the day that it would be resolved. if we gap down does this mean that market was concerned about this event?
—————– (01/20/2018 09:59) —————–
David B: what number if we close below with two consecutive closes would be a trend reversal?
—————– (01/20/2018 10:01) —————–
Mark Glezer: This year is marked by the cash trading with a discount to ES that is abnormal, a reversal of the usual pattern. Why do you think that is happening?
—————– (01/20/2018 10:04) —————–
Mark Glezer: I also attribute to potential interest in ES
Mark Glezer: yep
David B: i was not here in the begining wat is your view in the massive runup to start the year?
—————– (01/20/2018 10:06) —————–
David B: are we getting in your opinion to an exhaustive phase?
nic c: LFUS – FARO – ADSK – TSEM
—————– (01/20/2018 10:09) —————–
David B: could you see this continuing this pace until earnings season is over?
—————– (01/20/2018 10:12) —————–
ljr ipad: watching the daily recaps…you used to talk about buyers/sellers gaining traction with regard to the noon hour and afternoon timing window highs and lows…are those still relevant?
—————– (01/20/2018 10:21) —————–
ljr ipad: lol
ljr ipad: it was hi
nic c: is GE off the menu as poss stock of the year?
—————– (01/20/2018 10:25) —————–
Mark Glezer: BAC
David B: WDC,FCX
—————– (01/20/2018 10:28) —————–
Mark Glezer: MS, C
—————– (01/20/2018 10:33) —————–
nic c: pls dont forget LFUS
—————– (01/20/2018 10:44) —————–
Mark Glezer: what is the upside target on BAC ?
—————– (01/20/2018 10:54) —————–
Mark Glezer: thx much
—————– (01/20/2018 10:56) —————–
ljr ipad: thx.
David B: thanks
PHONETIC transcript
having difficulty getting an let’s just hold this for a moment and I will start in a couple minutesAlright good morning and welcome it is Saturday it’s time for the Saturday with you thanks everyone for taking time out of your weekend to join us or of course to watch the recording but in any case to know more about what is technically underpinning the market what the charts project for the resolution and how to identify head of time by the way and so when is a new trend extreme at any point of the day on expiration and essentially new trend extreme close in either direction in this case of high on a Friday requires there to be an eventual follower in the case not of another friend extreme intraday but an actual close and if there issend extreme plus it’s just reverse-engineer this if we know historically that based on Fridays new trend extreme close there will be another during this cycle before prior low is tested which shouldn’t even be touched because the 61:8 retracement should hold which really doesn’t even need to be touched because the 38th to was already productive well really we shouldn’t see anything but higher highs or shallow temporary brief pullbacks in the intro that’s the template that were looking for as price action Begins for the new weekan above where the momentum at least being willing to buy pullbacks but realistically and looking for some sort of retail reaction down initially or the potential for that Monday assuming there’s no agreement over the weekend that overcomes the closure of the government closure probably going to get some jerk reaction sohusband that’s already done here so there’s not a lot of room for lower prior highs in this range but like a 61 8 retracements if there is something down to 2799 2800 that’s not going to tell us enough that the market is reversing down it’s the Post open Action it’s going to be most predictive all right a perpetual motion machine that circular argument Market is rising because it’s rising open is trying to get something donehow to draw down on Tuesday from at I literally a 100% swing from Friday’s close from Friday’s close to Tuesday’s high and then back down literally 100% swing the death of course which is 30 stalks is outperforming if we see that we haven’t seen it is necessarily in one way we did and that is the drawdown on the Dow was much less in the morning and then coverage inabout between all the doing headlines and and there’s even three or four sides coming out but there were a lot of headlines and it’s not so much that the headlines triggered reactions which they did here late in the day I think that was a comment from it it’s on Thursday that was a comment from Nick Mulvaney saying that he put the odds of a government shutdown a 50/50traits and then if you want to look at backwardation I don’t I don’t really I just been seeing them fluctuate to whatever degree maybe there’s some interest in being in Futures being in hedging and not actually owning the underlying I don’t really know why that would be generally there’s so many different reasons are there can befigured to an exhausted face depends on what is what is the definition of exhaustive and what is the resolution of exhaustive there’s a couple out there what is that when you get in the exhausted phase you start seeing gaps up you start seeing another term for the exhaust of his capitulate if you start seeing the opposition capitulate and literally short squeezing overnightcovering their sectors make their calls to the companies they cover and see how things are coming along see how the quarter went here is a pretty good indication that they heard what they heard good things so I would expect for that reason the first week to be decent and if it’s notso I have been considering creating coverage of Arnold or the recommendation actually 61.8% retracement that’s nice helpful get back out of 36 on volume I definitely want to see volume expand sharply back above 36 I consider that to be back in play the uptrend underwaythat’s probably good morning skip that let me know if that wasn’t just a good morning and I’ll DGMTBH so I think that nothing really new other than actually testing its by signal closes above it but there was any prior Richard A Range so they’re a little suspicious but I like volume volume was pretty good on it much better than on the reversal on the reaction expect this is just a temporary correction that resistance is being chipped away at 14 was that 1485 and that this was just a correction of that and the correction really should be ended it was a 61.8% retracementTwitter see when you see a preponderance of inflection points however there created and the market just explodes or implodes whichever way to get out of that constriction that’s a pretty good it’s definitely that’s typically reliabledefinitely a lot of resistance up here not that it had to that the resistance of your has to be terminal the end of the road I don’t even think it is but the pattern did get pretty extended 10270 is a candidate for a pullback and it one or two 70 doesn’t hold then 9305 is the next lower objective for a pullback which wouldn’t be the correctivetsem Tower semido I price momentum is really taking a hit here which historical E I mean it’s in an uptrend so of course history says that it was all but that doesn’t mean it will eventually history changes but when it has meant is at least sideways rangewhich would be triggered under 3175 thank you for pointing that outlower highs the shallowness of the lower highs this is a widely followed stock I mean shouldn’t be surprise but I’m not seeing thathitting all sorts of website targets and even just for a corrective purpose avoiding reactions who knows anything from reacting down off of new highs as you got all that extra room too expensive and pressure without it actually damaging the chart this actually comes close but just one close and then it’s retraced immediately pattern price action is clearly been responding to it and you would think that it wasthought I was looking at Western Digitalreally gotten shoppie and so that makes it much less predictable also make it less predictable is it has already tested and responded to the predictable levels so while the upside targets have been met and even probed there’s a lot of support down here at caught 76 77 50 tested once tested twice there’s no bullish reason for a third test so I would say that under 76 at this point 7608 would have would have an objective of 15 even deeper 62 63 otherwise I don’t think there’s anyall right next to her jective if Bank of America extends is 35 FedEx with that avoided 93 to 93 15 there is room for a pullback and its A3 so but pull back at 7:45 before signaling a deeper pull back so I’m stupidthat’s a big level being a probe right now 5425 5450 the next hour of ejected in play is 67 but we are still on the first probe above 5425 5450 so the only thing that I would see the railing 67 is a closed-back under 5350 and City32 has a lot of well I just took a really big area and it decisive way not decisive by plowing through it substantially but already having proved it and now closing even higher that’s 75-67 closing 7435 that would Point down at this point but otherwise are cigarettes which the FDA