Posts by Rod David
Look ahead: Economic Calendar – for Mon Jan 9, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s pre-open Fed speaker could set the morning’s tone, being its only economic event, high-profile or otherwise. The noon hour’s Fed speaker appears during a less liquid window, which can magnify the effects of any headlines.
*Eric Rosengren Speaks
9:00 AM ET
Labor Market Conditions Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Dennis Lockhart Speaks
12:40 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2280.00 | 2274.25 |
| …would target | 2285.00 | 2279.50 |
| Bias-down: under | 2271.50 | 2266.00 |
| …would target | 2266.00 | 2260.25 |
| Signal status: BIAS-UP | 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… Tried, tried again.
Another sell-off, another recovery.
Opening at this morning’s 2266.00 bias-up signal didn’t attract any strong-handed sponsorship. 
At least, no buyers. Immediately plunging barely stopped until piercing the 2258.75 bias-down signal by 2 ticks.
Actually, the plunge did stop there. Bouncing nearly 4 points was largely retraced back to the low. Bouncing again recovered back up to 2266.00. Both bias signals held tests, so no offsetting test of the other bias signal is required. It is otherwise a normal no-bias environment.
The opening drop is a third sell-off thrown at the market, including Wednesday night’s choppy drift and yesterday morning’s EIA reaction. It’s also the third to recover completely. All of which is potentially bullish, if ever the recoveries’ ~2264.50 high were exceeded coming out of a timing window..
Hovering at or under session highs could launch a new upleg into and out of the noon hour. A dip to 2261.00 just retraced 61.8% of the bounce. That’s not hovering. But quickly recovering back up to the bounce’s highs — quickly — and then consolidating there would still be credible for launching an afternoon upleg.
Inhibition ahead of late-morning and early-afternoon Fed speakers could be responsible for a range-bound morning. They could also be the catalyst to breaking out either way. Late-afternoon Fed speakers will keep participants jumpy, too.
Pre-market Tour (recording & summary)
A relatively modest reaction to payrolls is ranging around this morning’s 2266.00 bias-up signal. Finally probing above yesterday’s highs isn’t necessarily bullish, not without also maintaining the probe through the open, and also extending higher to trigger the bias-up. All of which should start developing early, except for potentially dipping back down to yesterday’s ~2264.50 lower prior highs. Any indication that strong-handed sponsorship isn’t being attracted would instead be bearish.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Anxiously awaiting payrolls.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
After two consecutive updays, Thursday was likely to offer another upleg at some point, so long as sellers had not retaken control at the open. Sellers did not retake control at the open, despite having drifted downward overnight to test 2259.00 and gap down slightly. Quickly filling the gap back up to Wednesday’s 2264.50 close was the morning’s only rally. The morning eventually plunged to 2254.00 in reaction to Crude Oil tumbling. The afternoon trended back up, retracing all of the morning’s drop. But only all of the drop, and not any higher, let alone closing above the morning’s high.
Overnight action’s new info…
Still no higher high as price has drifted flat-to-lower ahead of this morning’s Employment Situation report. The 2261.50 low was touched through Europe’s opens, bouncing since then back up to 2264.50.
If, then…
The most bearish factor currently is not what sellers did yesterday, but what buyers did not. An overnight slide and morning plunge each were retraced separately. But neither retracement was reversed above their drop’s origin. That leaves this week’s recovery attempt vulnerable to this morning’s catalyst, the Employment Situation report. It’s not being greeted from the position of strength that would have been offered by closing positive. An initially negative knee-jerk reaction down could still be absorbed and recover, but must be absorbed and recovered quickly to set a bullish tone for the morning. The reaction to the day’s two later Fed speakers has potential to be bullish, but their anticipation is likely at best to inhibit optimism. Gapping up must still be maintained through the open to expect extending higher into the afternoon.
First Trade…
[Click here to view the Bias parameters] No preliminary indications are available before an Employment Situation report.