S&P
Mid-day Update… Position of strengthiness.
Surging into the noon hour ahead of the news.
When this morning’s bias environment was finally in view of lapsing, its 1987.50 bias-down signal finally stopped restraining a recovery. Its break extended up through prior highs to test 1910.00 into the noon hour.
A pullback to the 1900.00 prior highs has prevented triggering the 1905.50 bias-up signal. This is a no-bias environment. Exceeding 1905.50 through 1:30 would invalidate the no-bias. Probing above it later would be required to retrace.
Meanwhile, the FOMC policy statement is a half-hour away. Volatility is likely to explode in reaction. Testing 1913.00 before reversing down would be likelier than simply trending down, while trending up through 1913.00 to 1924.00 is possible.
Look ahead: Economic Calendar – for Thu Jan 28, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Durable Goods pre-open Thursday has a track record for influencing price action. And that tends to be duplicated by subsequent econ reports. Meanwhile, residual reaction from Wednesday’s FOMC statement should persist.
*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
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 | 1912.50 | 1905.50 |
| …would target | 1918.50 | 1911.50 |
| Bias-down: under | 1906.50 | 1899.50 |
| …would target | 1900.25 | 1893.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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… Pessimism again.
Opening recovery attempt fails..
Probing above the 1890.00 overnight highs pre-open had reacted down post-open to touch the 1887.50 bias-down signal. It reaction up probed fresh highs up to 1894.25.
And held.
The 1887.50 bias-down signal was probed in reaction to the 10:00 econ report. That extended sharply to test the 1881.00 bias-down target by 10:15.
And held.
This is a bias-down environment whose target has been met. Usually, that establishes the morning’s floor. But not renewing the bias-down by 10:15 doesn’t prevent probing under its target after 10:15. This is, after all, a bias-down environment.
Meanwhile, retesting 1881.00 has produced a bounce up to 1889.50. That’s above the 1887.50 bias-down signal, which should define the the bias environment’s upper-end, until approaching its 11:30 exit.
Pre-market Tour (recording & summary)
The overnight range is improving ahead of the open. Fresh highs are now only 3-4 points under yesterday’s 1896.00 close, which is a 2-3 point improvement from the overnight range.
It’s also above the 1887.50 bias-down signal. Testing it intraday and holding its test would put into play an offsetting test of the 1898.00 bias-up signal.
At least retesting yesterday’s highs is still likely even if bias-down isn’t first tested and rejected, but we wouldn’t have the confidence of it being required. Similarly, triggering bias-down would likely retest overnight lows.
Details and other markets coverage are discussed in the pre-market Tour recording here.