S&P
Look ahead: Economic Calendar – for Wed May 18, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Volatility tends to become inhibited ahead of Wednesday afternoon’s FOMC Minutes release. Its reaction can be muted if there are no surprises. However, confirming an aversion hiking rates might be as influential as any language that suggests it is not being rejected.
MBA Mortgage Applications
7:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
*FOMC Minutes
2:00 PM ET
WedEX Indicator
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2068.25 | 2062.25 |
| …would target | 2071.50 | 2067.50 |
| Bias-down: under | 2057.25 | 2053.25 |
| …would target | 2052.25 | 2048.25 |
| Signal status: noN-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… Biding time.
Bias-down morning points to trending afternoon.
Traction gained by yesterday afternoon’s rally goes unfulfilled. It wasn’t even inverted, as the opening gap bounced off of the 2059.25 bias-down signal instead of extending immediately through it.
Gapping down did eventually extend, quickly touching its 2053.50 bias-down target. It has been tested and retested, despite already having fulfilled it, and despite chipping away at its support. This is still a bias-down environment, but no lower low is required.
2050.50 would be a lower lower where sellers could become so stretched that price reverses back up aggressively. Its test isn’t required, but it becomes likelier as the bias environment approaches without yet threatening to recover the 2059.25 bias-down signal — it’s being attacked now to within 2 ticks.
Backing-and-filling this morning is not at all inappropriate before resuming the rally this afternoon. Yesterday afternoon’s unrewarded traction won’t be compensated for its delay — but it should at least prevent the backing-and-filling from extending down beyond this morning’s bias environment. Otherwise, the third consecutive weekly recovery attempt will have failed.
Pre-market Tour (recording & summary)
The overnight probe of yesterday’s 2068.50 high had reacted back down to the earlier 2060.00 low. Now that has extended lower to test 2057.00 as support. Recovering the 2059.25 bias-down signal through 10:15 would put into play an offsetting test of the 2067.50 bias-up signal — and reward the traction gained by the rally yesterday afternoon. Triggering bias-down would invert that traction, which is less likely,
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Just a dry-run?
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…
Monday’s open wasn’t plunging from 2043.00, so the likely alternative was a recovery. The morning’s bias-up extended through its target, triggering the afternoon’s bias-up which probed its target up to 2068.50, The rally gained traction at the last two timing windows. That didn’t prevent signaling a retracement back to the 2060.00 area, and meeting it into the futures close.
Overnight action’s new info…
Narrow ranging supported by 2060.00 eventually began firming. That steepened into and out of Europe’s opens, probing yesterday’s high by 1 point up to 2069.50. But only briefly, as its reaction down has attacked 2060.00 to within 1 point.
If, then…
Was the overnight rally a harbinger of intraday follow-through, or did it fulfill the follow-through? Having gained traction, the rally need not resume immediately or aggressively Tuesday. But any post-open dip should be brief as the morning is still likely to trend to fresh highs. Gapping down under the prior afternoon’s 2059.25 low (which is also the morning’s bias-down signal) could invert Monday afternoon’s traction. This continues to be a risk only because its a pattern established by the prior two weeks’ initial recovery attempt. A lot depends on a second consecutive rally day, which would make new highs likely, and likely soon.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2058.00 would be likely to trigger the 2059.25 bias-down signal at 10:15. Exiting the open above 2065.00 would be unlikely to trigger bias-down. Exiting the open at 9:45 above 2069.25 would be likely to trigger the 2067.50 bias-up signal.