S&P
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1896.25 | 1892.25 |
| …would target | 1901.25 | 1897.50 |
| Bias-down: under | 1885.75 | 1882.00 |
| …would target | 1879.50 | 1875.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Mid-day Update… Onward and upward?
Post-open dip recovered and reversed.
Nothing about the opening dips suggested that their sponsorship was strong-handed. That doesn’t prevent dipping, but the recovery tends to be aggressive. And it was.
Testing this morning’s 1871.50 pullback limit launched a reversal that probed fresh session highs at 1887.00 going into the noon hour. That was extended up to 1891.50 coming out off the noon hour.
Exiting the bias environment at 2:30 above 1891.50 would essentially marginalize sellers for the day. Fresh highs targeting 1907.00 and potentially 1920.00 would be in-play.
Back under 1886.00 would start to signal no further upside for today, and potentially a slide to the 1873.00 area.
Look ahead: Economic Calendar – for Wed Feb 17, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Any reaction to Wednesday’s pre-open PPI is likely to be duplicated by the morning’s subsequent reports. But price action should react strongly to the afternoon’s FOMC Minutes, which will reveal how narrowly another rate hike was avoided.
MBA Mortgage Applications
7:00 AM ET
Housing Starts
8:30 AM ET
*PPI-FD
8:30 AM ET
Redbook
8:55 AM ET
Industrial Production
9:15 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
E-Commerce Retail Sales
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1887.75 | 1883.75 |
| …would target | 1893.75 | 1890.00 |
| Bias-down: under | 1882.25 | 1878.50 |
| …would target | 1876.75 | 1872.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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… Sliding out of home.
Late dip extends well toward bias-down target.
The 1882.25 open dipped to 1879.00 but recovered the dip fully at 9:45. The burden of proof was on sellers, they tried, and they failed. That would be bullish if buyers had exploited it by reversing above the open, but they did not.
And sellers exploited that. Another dip fell to 1875.50. Reacting up to probed its bounce limit higher than its first 3 minutes. Not by much, not for long, and not without continually overlapping it. All of which sellers exploited by dipping again to 1872.50.
Late breaks reflect weak-handed sponsorship. They don’t prevent extending down, but that typically ends aggressively back to the upside. Coming within 3 ticks of the 1871.50 bias-down target instead of just 4 would have helped to suggest that sellers are done.
Nevertheless, back above the 1878.50 bias-down signal at 10:30 or 11:30 would trap shorts. Otherwise, the 1871.50 bias-down target remains in-play.