S&P
Look ahead: Economic Calendar – for Thu May 26, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Fed speaker “Bull”ard’s timing makes him less likely to influence price action. Post-open Durable Goods has a long track record of influence. Impact by the noon hour’s Fed speaker is more likely for its timing during an otherwise less liquid noon hour.
James Bullard Speaks
5:15 AM ET
*Durable Goods Orders
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
*Jerome Powell Speaks
12:15 PM ET
7-Yr Note Auction
1:00 PM 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 | 2092.25 | 2089.50 |
| …would target | 2097.50 | 2094.75 |
| Bias-down: under | 2085.00 | 2082.25 |
| …would target | 2078.75 | 2076.00 |
| Signal status: BIAS-UP | 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… Clean plate club.
Straight out of the open, straight up, straight to its target.
The overnight rally had met the 2085.75 bias-up target to within 1 tick. Its pre-open pullback pierced this morning’s 2080.50 bias-up signal by 1 tick. The post-open recovery didn’t hesitate. A buy signal quickly triggered above 2083.75 and extended to fresh highs.
Minutes after renewing the bias-up signal at 10:15, the 2092.00 renewed bias-up target was touched. Its 3-1/2 point reaction down has violated the pullback limit. Simultaneously overbought 1-minute and 3-minute RSIs at the high require its retest.
If not for the high’s required retest — probably up to 2092.75 — a sell signal would already have triggered. A little deeper pullback under 2088.25 would be likely to extend to 2084.00 before recovering.
This may be an opportunity for the rally’s sponsorship to rest, refueling by letting shorts trap themselves. A repeat of yesterday’s session-long rally is not impossible, but also not likely.
Pre-market Tour (recording & summary)
Rallying overnight to attack this morning’s bias-up signal is running the risk of the open attracting more strong-handed sellers than buyers. Probing above 2079.75 but not maintaining it through the open would suggest that trending will invert back down. Successfully negotiating that hazard could point sharply higher this morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Very important update today.
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…
Tuesday’s “session-long rally” setup succeeded at producing each of its required elements, i.e. all but one timing window probed its prior timing window’s high. Gapping up above prior highs offered a highly-reliable early entry to capture almost all of the first hour’s 15-point first hour surge, which fulfilled the 2068.00 objective and touched its room for noise up to 2072.00. The next higher objective at 2080.50 was barely attacked to 2077.25, which reacted down 5 points into the close.
But the one timing window not probing higher was the afternoon bias environment, which prevented the rally from gaining traction for its effort.
Overnight action’s new info…
The rally resumed with little delay, attacking the 2080.50 objective, which is this morning’s bias-up signal. Surging to 2084.50 reacted down into Europe’s opens and consolidated at 2078.50. The rally resumed and extended to fresh highs within 1 tick of this morning’s 2085.75 bias-up target, now reacting down to 2082.50.
If, then…
So, is this time different? The past three weeks began with failed recovery attempts. Tuesday’s was no less convincing, rallying steeply throughout the day to test resistance. Tuesday’s attempt is offering something new — extending higher overnight. This was expected, as follow-through is normal following a session-long rally. More so, it maintains a steep slope, which we’ve long expected to characterize a valid recovery. It’s now threatening to invalidate the widely watched Head & Shoulders pattern, which I’ve noted wasn’t valid. And after the Friday-Monday hibernation, the wide intraday ranging appears to be back on-track.
[So sorry for the length this morning, but there’s a lot…]
What if this time isn’t different? Gapping up is the only credible start to a durable rally, since Tuesday’s rally didn’t gain traction for its efforts. But trending up overnight can invert to trending back down from the open, if the open were to hold a test of relevant resistance. Otherwise, Tuesdays breakout is in position to be confirmed by a second consecutive higher close. That would require at least one more higher close, and probably extend to new highs.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2076.00 would be unlikely to trigger the 2080.50 bias-up signal at 10:15. Exiting the open above 2082.00 would be likely to trigger bias-up. Exiting the open above 2088.00 would be likely also to exceed the 2085.75 bias-up target at 10:15 to renew the bias-up signal, next targeting 2091.50.