Posts by Rod David
Look ahead: Economic Calendar – for Thu Jan 5, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is busy, but not very high-profile. Still, any obvious reaction to the pre-open reports is likely to be duplicated in reaction to the post-open reports. Meanwhile, EIA reports on both Crude Oil and Nautral Gas due to this being a holiday-shortened week.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*EIA Petroleum Status Report
11:00 AM 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 | 2271.50 | 2265.75 |
| …would target | 2276.50 | 2271.75 |
| Bias-down: under | 2264.75 | 2259.00 |
| …would target | 2259.00 | 2253.25 |
| Signal status: NO-BIAS | 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… Anchor away.
Gap up above prior highs is maintained.
Extending yesterday’s late rally this morning was likely to begin immediately, if at all. The 2256.25 open shot up 5 points, and then another 3-1/2 points to touch 2263.75. That was the first 5 minutes.
So, resuming the rally did start immediately. Fulfilling the rally was pretty immediately, too. The balance of the first hour back-and-filled down to 2257.50. The 2259.50 bias-up target was exceeded through 10:15 to renew the bias-up signal, although its renewed bias-up target was already pierced at the high.
But the open’s range was maintained above prior highs. Above yesterday morning’s high, which was reversed upon testing “higher prior lows.” Above those higher prior lows. And above last Wednesday morning’s first consolidation of the open’s plunge.
This is an anchor. It doesn’t prevent reversing down, but does help to ensure a reversal’s complete eventual recovery. Another dip under 2258.50 would likely trigger that attempt to reverse down. Otherwise, a probe above 2273.00 is the ultimate objective.
Pre-market Tour (recording & summary)
Fresh highs touched this morning’s 2258.50 bias-up target, and soon reacted back down to 2256.50. Extending the rally post-open is unlikely to hesitate, while back-and-filling can begin slowly.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Not yet backing down.
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…
The new year arrived with a gap up from 2236.50 and rally Sunday night, a gap up and rally through Monday’s open up to 2259.50, and then a plunge through the morning down to 2239.50. The plunge retraced only the overnight lows, which was still 4 points above Friday’s close. That was 2240.50, which had been relevant support — albeit brief support — on Friday. Being a new year, it was tested throughout two timing windows, and then broke higher during the 3:37-3:52 position-squaring window to its 2252.25 target..
Overnight action’s new info…
Except for the open’s brief dip to 2251.00, yesterday’s late rally has only extended higher overnight. The slope is shallow, but steady, eventually touching 2257.00. Reacting down nearly 3 points has recovered entirely.
If, then…
Gapping down under yesterday afternoon’s lows could have formed a “session-long decline,” which would have proved instantly that the late surge was a false break. That’s not happening. Gapping up isn’t immune to reacting down post-open, but the overnight gain and late surge can absorb a lot of selling pressure before damaging their uptrend. that’s if there’s a reaction down, at all. The overnight rally stopped pessimistically short of resistance at 2257.50 before its deepest correction. That pessimism can be bullish from a contrarian perspective. A morning rally will be likely so long as any post-open reaction is shallow, or simply avoided. Otherwise, a post-open dip will have room before targeting a retest of yesterday’s lows — which is required eventually, and now even likelier to break lower at that time.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2250.50 would be unlikely to trigger the 2253.50 bias-up signal at 10:15. Exiting the open above 2255.50 would be likely to trigger bias-up.