S&P
Mid-day Update… Another bite at the apple.
Late-morning surge isn’t backing-off. Or extending.
Not immediately rejecting the overnight slide to 2147.50 had made fresh lows likely post-open. A blip-up to 2151.75 quickly resolved down.
Fresh post-open lows down to 2144.50 had created a new opportunity for rejecting sellers. There wasn’t even a blip-up before eventually extending lower to 2143.50.
Quickly rejecting that last low would still be credible for extending up. In fact, the bias environment ended by surging back up to and through the open’s highs. The noon hour quickly printed 2156.75. And then quickly stopped extending.
An extremely narrow 3-point noon hour range has been choppy, but not trending. Still not trending, after an entire timing window has elapsed since a direction-changing surge. A recovery must be obvious this afternoon to avoid another downdraft. Otherwise, the surge was only a correction that refuels the decline.
Look ahead: Economic Calendar – for Fri, Oct 7, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s monthly Employment Situation report is among the most reliable to influence price action. It isn’t often released in a vacuum with no other econ reports nearby, let alone among multiple Fed speakers .
*Employment Situation
8:30 AM ET
*Stanley Fischer Speaks
10:30 AM ET
*Loretta Mester Speaks
12:45 PM ET
*Baker-Hughes Rig Count
1:00 PM ET
*Esther George Speaks
3:00 PM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Lael Brainard Speaks
4:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2164.00 | 2157.50 |
| …would target | 2169.50 | 2163.00 |
| Bias-down: under | 2154.75 | 2148.25 |
| …would target | 2147.75 | 2141.25 |
| 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… Not extending.
Open’s break not rejected, yet.
Not rallying quickly post-open and rejecting the overnight slide was likely to extend down. The open’s blip-up touched 2151.75 and reacted down to fresh lows at 2145.75. And then lower to 2144.50.
That fresh low created a new feature for buyers to reject. And as it would have been rejecting the overnight slide, rejecting the fresh low would be bullish.
So, how’s that going?
The bias signal’s grace period was avoided by 1 tick at 10:15. Then it avoided being invalidated by not decisively recovering the 2147.75 bias-down signal at 10:30. So, this is a bias-down environment by 1 tick at 10:15, and still overlapping 2147.75 at 10:30.
Not very convincing. But official.
There has yet to be a fresh low since 10:15. Exiting the bias environment above the open’s 2151.75 high could invalidate the bias-down. Otherwise, having then failed to reject fresh lows for an entire extra timing window, buyers could become marginalized for the day.
Pre-market Tour (recording & summary)
The overnight drop testing this morning’s 2147.75 bias-down signal had bounced up to 2151.50. Its reaction down touched 2147.75 and bounced again. While this range can be tested again post-open, exiting the open above it would be bullish. But not already rallying out of the open would make the drop more vulnerable to extending down this morning. Extending the decline need not be obvious quickly or become very productive, but a credible rally should be very obvious much sooner rather than later.
Details and other markets coverage are discussed in the pre-market Tour recording here.