Posts by Rod David
Look ahead: Economic Calendar – for Wed Jan 4, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s ADP is an opportunity to fine-tune expectations for Friday’s reaction to its pre-open Employment Situation report. It has a reliable track record for triggering a reaction, and for setting the tone of Wednesday’s other reaction. The afternoon’s FOMC Minutes will be watched closely for signs of future anticipated rate hikes.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
Redbook
8:55 AM ET
Gallup US Consumer Spending Measure
2:00 PM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2252.25 | 2246.75 |
| …would target | 2257.50 | 2252.00 |
| Bias-down: under | 2245.00 | 2239.50 |
| …would target | 2239.50 | 2234.00 |
| 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… Good, better, best.
Rally’s extension retraced, and reversed.
Gapping up to 2252.00 wasn’t immediately attractive. Blipping-down before probing higher still peaked 5 ticks short
of the 2255.25 pre-open high. And even that was reversed down to a fresh low. But the fresh low stopped 1 tick short of even touching 2248.00.
Its break would have marginalized buyers — instead, its attack dumped all available sellers. So, momentum reversed up. More than 11 points.
That probed “higher prior lows” above 2255.00 for the first time intraday. And 2257.50 was being tested. Both held, and both were rejected. A simple correction would target 2251.00, and it was quickly tested.
2251.00 was also quickly broken, and soon this morning’s 2254.25 bias-up target was being tested down to 2244.00. It was too late for probing under 2248.00 to marginalize buyers. And too early. It’s still being tested now, as the bias environment comes within view of lapsing.
The open gapped up, and extending higher made it a productive gap up. Exiting the bias environment under the open’s productive gap up is not bullish. Not unless another rally leg exits the noon hour back above the open.
Oversold RSIs at the low still require a retest, but I would start giving that a benefit of the doubt back above 2248.00. Otherwise, nothing prevents filling the gap back down to Friday’s 2236.50 close, or even resuming the decline next targeting 2215.00.
Pre-market Tour (recording & summary)
The rally to 2255.25 has reacted down 5 points to 2250.25. This attacks Friday morning’s 2248.75-2249.50 open. Maintaining its recovery through the open is the likeliest scenario that avoids backing-and-filling this morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Off to a good start (for longs).
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…
Friday’s decline didn’t find an air pocket. But selling pressure was relentless, and traversed the entire 2230-handle, anyway. And it trended, in a series of lower lower lows and lower highs. Starting at the morning’s 2248.00 bias-up signal, with its sights set 2230.00-2232.00, the target was met, even probed by more than 1 point. A bounce tested the target range’s upper-end into and out of0 the cash session close up to 2237.25. No new objectives were created that weren’t also met intraday.
Overnight action’s new info…
Strong economic news from China and limited terrorist incidents over the holiday have combined to start off the new year strongly. Monday night’s open gapped up above Friday afternoon’s highs to 2241.00 and extended immediately to 2245.00. A 5-point pullback was recovered to fresh highs before midnight as the rally resumed into Europe’s opens. Peaking at 2251.50 was pessimistically short of Friday’s 2252.00-2253.00 pre-open highs. Resuming the rally again has extended to 2255.25, testing Wednesday morning’s “lower prior highs.”
If, then…
Attractions below at 2215.00 would have been in-play if today’s open were anything weaker than a gap above Friday afternoon’s 2239.00 high. Globex opened above it, extending far above it. Friday’s late drop is rejected, along with the traction sellers had gained, and its momentum is reversed up. Extending higher through the open could form a “session-long rally” setup targeting new highs. That’s not assured, as the open is currently indicated to test “higher prior lows,” and not extending higher through the open would more likely resolve in backing-and-filling through the morning. Regardless, a gap back at Friday’s 2236.50 close is now left outstanding below..
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2249.50 would be likely to renew the bias-up signal by also exceeding the 2245.25 bias-up target at 10:15. Exiting the open under 2246.00 would be unlikely to renew the bias-up signal.