Posts by Rod David
Look ahead: Economic Calendar – for Fri Jan 6, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Employment Situation report isn’t often accompanied by other econ reports. But its reaction will set the tone for the post-open Factory Orders. Two Fed speakers before and after noon — the first Fed speakers since before the holidays — will help to keep alive volatility despite the fast-approaching weekend.
*Employment Situation
8:30 AM ET
International Trade
8:30 AM ET
Factory Orders
10:00 AM ET
*Charles Evans
11:15 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*Jeffrey Lacker Speaks
1:00 PM ET
*Charles Evans
3:10 PM ET
*Robert Kaplan
3:130 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2266.75 | 2260.50 |
| …would target | 2272.25 | 2266.00 |
| Bias-down: under | 2259.75 | 2253.50 |
| …would target | 2253.00 | 2248.75 |
| Signal status: LATE 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… Process of elimination.
Overnight selling stopped.
Extending the overnight decline this morning required that post-open sellers make themselves obvious almost immediately. They didn’t.
Drifting downward relentlessly until testing the 2259.25 bias-down signal was unable to attract new sponsorship. Overnight headlines were discounted overnight. The open bounced.
Not that momentum has reversed up. Unchanged around 2264.50 has held several tests as resistance. And not that a recovery is required. The open’s blip-down to 2260.50 didn’t touch the bias-down signal, so no offsetting test of the 2267.75 bias-up signal is required.
But the burden of proof was on sellers, and they offered none. Whether this morning or this afternoon, an actual rally through yesterday’s 2267.00 high is likely. And probably also through last week’s 2269.50 high and higher. Only exiting the bias environment under its bias-down signal would start to suggest otherwise.
Pre-market Tour (recording & summary)
Retailers sinking on a couple of company warnings. Dollar sinking after China declares war on the USD. And S&Ps sinking — but only to test this morning’s 2259.25 bias-down signal as support. If it doesn’t trigger, then it won’t be for lack of proximity. Almost any delay in extending down post-open would likely resolve up either this morning or this afternoon.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Back-to-backing-and-filling.
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…
Extending Tuesday night’s rally required almost immediate evidence at post-open Wednesday. And 8-point surge attacking 2264.00 did that, but also expended all available near-term buying pressure. That’s how Tuesday morning’s surge resolved, but not Wednesday. The morning’s 6-point correction resolved up to fresh highs at 2267.00, closing just above the open’s surge.
Overnight action’s new info…
Flat-to-lower ranging attacked 2260.00 before Europe’s opens. Its reaction didn’t resume the rally, while ranging choppily around yesterday morning’s ~2264.00 surge high. Until the recent several minutes, which broke lower to fresh lows touching this morning’s 2259.25 bias-down signal.
If, then…
The two-day rally has retraced all but 2-3 points of last week’s decline from its 2269.50 high. And all but 6 points from the 2273.00 high. Two consecutively higher counter-trend closes have properties similar to a confirmed breakout — No higher close is required, but a pullback would likely recover. And a pullback today requires immediate evidence, similar to yesterday’s opening setup for extending the rally. So, regardless of gapping down, not sliding through the open should eventually resume the rally today, but sliding through the open is probably not a near-term buying opportunity.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2257.50 would be likely to trigger the 2259.25 bias-down signal at 10:15. Exiting the open above 2261.75 would be unlikely to trigger bias-down