Posts by Rod David
Look ahead: Economic Calendar – for Fri Dec 30, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s post-open PMI is released privately to its institutional subscribers before it’s released publicly, when any obvious market reaction to the private release tends to be duplicated. The bond market closes early for the holiday weekend, which could enhance volatility into the close.
*Chicago PMI
9:45 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Bond Market early close
2:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2251.75 | 2247.00 |
| …would target | 2256.75 | 2252.00 |
| Bias-down: under | 2245.25 | 2240.50 |
| …would target | 2240.00 | 2235.25 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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… Anchor vs. Air pocket.
Isolation open has yet to perform.
The open has yet to probe negative territory under yesterday’s 2245.25 close. It could have been probed down to yesterday’s 2243.50 low, and still formed an isolation setup. But until the setup is productive — actually launching a rally — it is vulnerable to failure.
Once it fails, it has failed. Until it fails, it has not. And that’s where the isolation setup finds itself now. Not failed, but may yet.
The opening 15 minutes of volatility touched 2250.00 without exceeding it, which was the preliminary indication making the 2248.75 bias-up signal unlikely to trigger at 10:15. And bias-up didn’t trigger at 10:15, putting into play an offsetting test of the 2242.00 bias-down signal.
That’s under the overnight low. Any lower would be vulnerable to an air pocket that stretches through the entire 2230 handle. The open’s temporary isolation could have formed an anchor to help absorb fresh lows. Rejecting 2242.00‘s test quickly and decisively could form the last bottom of the year.
Not recovering fresh lows, air pocket or not, would next target 2215.00. Probably lower, and probably this year.
Pre-market Tour (recording & summary)
Recovering from the overnight test of 2243.00 extended briefly to a fresh session high attacking 2247.75. Its reaction down to unchanged at 2245.25 has held. It should continue to hold, or be probed only momentarily as low as 2243.50, to isolate the overnight low. Otherwise, beware of a potential air pocket if the overnight low is retested.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… (AND A SPECIAL NOTE)
Proper context can start the day with a solid win and make all the difference.
PROGRAMMING NOTE: TODAY’S PRE-MARKET TOUR WILL BEGIN 15 MINUTES LATE AT 9:10 AM ET.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Wednesday’s 24-point plunge converted a gap up into a retest of prior lows.Such is the risk of one-sided overnight sentiment. The rally’s challenge was to immediately extend above 2266.50, but breaking immediately back under 2265.00 began signaling that had become unlikely. Bias-downs were signaled, targets were met, and also exceeded to put into play “unfinished business below” at 2243.00. Attacking it to within 2 ticks pre-close didn’t qualify as fulfilling it, but the close was in its orbit.
Overnight action’s new info…
Relatively narrow sideways ranging developed largely in positive territory. The 2245.00-2247.00 range eventually broke lower and slide down to 2242.25 at Europe’s opens. Firming since then has attacked 2247.00 as resistance.
If, then…
The attraction to 2243.00 has been neutralized. Barely piercing it doesn’t suffice for the retest of oversold RSIs, and doesn’t neutralize so much time and energy expended in the interim. Nevertheless, isolating its test to the overnight would be credible for launching a rally into the weekend. Isolating a deeper retest that recovers entirely during the open would be credible, too. Otherwise, not rejecting its post-open test could find an air pocket below. And trending down into the weekend would next target 2215.00 and 2205.00..
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2243.00 would be unlikely to trigger the 2242.00 bias-down signal at 10:15. Exiting the under 2248.00 would be unlikely to trigger the 2248.75 bias-up signal. Exiting the open above 2250.00 would be likely to trigger bias-up.