Posts by Rod David
Look ahead: Economic Calendar – for Thu Feb 16, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No Fed speakers are scheduled for Thursday or Friday, after front-loading the week with them. But high-profile and infulential reports will be judged tghrough the prism of their outlooks. This includes mostly the Philly Fed survey, which is the only Fed survey that is reliably influential to price action — and potentially an even greater catalyst this week, being released simultaneously with two other relevant reports.
Housing Starts
8:30 AM ET
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
30-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2344.25 | 2342.25 |
| …would target | 2350.00 | 2348.25 |
| Bias-down: under | 2336.25 | 2334.50 |
| …would target | 2331.25 | 2329.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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.
Post-open Review… Momentum slows, the pendulum swings..
Pre-open dip stalls the rally.
Yesterday’s lower open was the rally’s tool to replenish its energy. Holding a test of its bias-down signal through 10:15 had indicated that sellers were weak-handed — impatient and ineffectual — and trapped. Their scrambling to cover shorts or to re-buy helped to fuel the intraday recovery to new highs.
Yellen’s congressional testimony helped, too. Anticipation for it to be repeated today is probably responsible to some degree for the overnight surge to 2340.00. Already having discounted that is probably also responsible to some degree for trending down before the open.
And like a swinging pendulum, retracing that discount allowed it to reappear as Yellen’s appearance got closer.
In fact, the pre-open dip down to 2331.25 bounced through the opening 15 minutes of volatility to test the 2334.25 overnight high. Releasing her embargoed opening comments had no more bullish impact on prices, and the 2336.50 bias-up signal wasn’t even touched.
This is a no-bias environment. Neither bias signal requires being tested, because neither was tested already post-open.
That isn’t preventing a probe above the 2336.50 bias-up signal anyway. The open hovered at or under yesterday’s 2335.50 cash session close, but didn’t extend down. A bounce just touched 2338.00. It’s origin makes it “no-bias trending” that is doomed to failure. That doesn’t prevent a sizable detour to and/or through the 2340.00 overnight high to 2343.00-2344.00.
Back under 2334.75 at this point would signal the 2336.50 bias-up signal’s test had held. It wouldn’t require trending down, since no offsetting test of the bias-down signal is required.
The First Trade & Pre-open Tour Recording…
Proper context can start the day with a solid win and make all the difference.
NEW 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…
Tuesday broke two streaks. The first was not gapping up following three consecutive gaps up. But after holding a test of the 2321.50 bias-down signal down to 2319.75, Tuesday adhered religiously to this leg’s daily tradition of extending to new highs into the afternoon. Objectives left outstanding from Monday and created Tuesday morning were all neutralized along the way up to the afternoon bias environment’s 2335.25 peak. Surging into the fourth consecutive higher attacked 2338.00. Tuesday did break one other streak by leaving no “unfinished business above.”
Overnight action’s new info…
A quick pullback tested Tuesday afternoon’s high as support down to 2334.25. Consolidating narrowly until a midnight surge probed new high at 2340.00. There was no complexity to the surge before it reacted back down under Tuesday’s highs to within 2 ticks of the overnight low.
If, then…
Tuesday was the first session of this four-day rally to end in a short-squeeze. That’s not a sell signal itself, but it does reflect a new degree of impatient buying, which suggests that optimism is getting excessive. The overnight surge did not qualify for requiring an intraday retest, but it is a new trend high, so exiting the open under the overnight low could launch a pullback. Temporary backing-and-filling has room down to 2327.00 and 2324.50 before suggesting something more substantial underway. Avoiding a pullback this morning and extending higher would next target 2343.00-2344.00, but remain vulnerable to the indications that momentum is weakening. Regardless, like yesterday, be careful not to rely on early price action persisting — a lot is happening before 10:15, which I describe in today’s Tour.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2337.75 would be likely to trigger the 2336.50 bias-up signal at 10:15. Exiting the open under 2334.00 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2339.25 | 2336.50 |
| …would target | 2344.75 | 2342.25 |
| Bias-down: under | 2329.50 | 2327.00 |
| …would target | 2324.00 | 2321.25 |
| Signal status: NO-BIAS | FAQ | |
| 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.