S&P
Look ahead: Economic Calendar – for Fri Jan 22, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s LEI report is higher-profile than the PMI, but both have track records for influencing price action. The Chicago Fed survey does not.
Chicago Fed National Activity Index
8:30 AM ET
*PMI Manufacturing Index Flash
9:45 AM ET
Existing Home Sales
10:00 AM ET
*Leading Indicators
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1884.50 | 1877.25 |
| …would target | 1890.50 | 1883.50 |
| Bias-down: under | 1870.00 | 1863.00 |
| …would target | 1864.25 | 1857.00 |
| 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… Delayed gratification.
Is yesterday’s high finally being probed?
Not gapping down steeply kept alive the likelihood for rewarding yesterday’s rally by probing yesterday’s highs this morning. That’s difficult to believe when the pre-open surge to 1874.00 is reversing down to 1841.00 into and out of the close.
Just a little hiccup.
Testing the 1846.00 bias-down signal held through 10:15 to avoid triggering. That would put into play an offsetting test of the 1865.00 bias-up signal. But the bias-up signal was being tested at 10:15 to invoke the grace period.
And it was overlapped at 10:30 to trigger noN-bias.
Its 1869.25 bias-up target was met anyway. And it has been probed up to 1873.75. The reward due yesterday afternoon’s sponsorship (i.e. control of this morning’s bias environment) suggests that probing above yesterday’s highs will persist a little longer.
Pre-market Tour (recording & summary)
This morning’s First Trade preliminary levels are essentially moot. That’s because of a steep rally from the range that was centering on 1846.00. ECB chief Mario Draghi hinted at a future easing, triggering a surge to 1874.00. That has now reacted down 20 points to 1854.00, still in positive territory, suggesting that this morning will be spent probing above yesterday’s highs to reward the recovery’s sponsorship.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Hunkering down.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK <<==click here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Wednesday’s record-challenging gap down and extension to new lows had lost sponsorship at the 1804.25 noon hour low. The window had isolated a retest of the 1815.00 October 2014 “V” bottom. The balance of the afternoon rallied sharply to probe Friday and Tuesday’s “higher prior lows” up to 1869.25. The last half-hour settled back down to 1849.00, but the rally had already gained traction for its effort.
Overnight action’s new info…
The recovery immediately resumed and eventually extended to a fresh high at 1876.00, filling the gap back to Tuesday’s close. It was retraced entirely by midnight, on the way down to 1836.25 ahead of Europe’s opens. Choppy ranging since then has been narrowing around 1846.00.
If, then…
Durable bottom? No. Trading bottom? Possibly. Invulnerable bottom? No. DeMark is calling yesterday’s selling intensity on par with the starts of 5-8% corrective bounces. Fair enough, but I would add 2-1/2 points: First, that it’s not a straight-line there, and second, Wednesday afternoon’s bounce already covered 2/3rds of the 5% objective. A corollary to those points is that correcting so much so quickly — during the same session as the alleged low — actually undermines the low instead of reinforcing it. In fact, half of yesterday’s recovery is already retraced overnight. Don’t forget that my active templates suggested that a capitulation was likely to span multiple sessions, which is not yet the case. Rising enough early enough would allow extending the bounce to reward the recovery for traction its gained. But fresh lows pre-open won’t have much time to recover before that traction finds itself inverting, and new lows are in-play.
First Trade…
Exiting the open at 9:45 under 1843.25 would be likely to trigger the 1846.00 bias-down signal at 10:15. Exiting the open under 1833.00 would be unlikely to recover the 1840.00 bias-down target in time to avoid renewing the bias-down signal, next targeting 1829.25. Exiting the open above 1853.25 would be unlikely to trigger bias-down.