S&P
Second wind.
Still trending to fresh highs.
This morning”s bias-up environment consolidated around the 2113.00 bias-up target, waiting patiently for the bias environment to start lapsing at 11:30. And then it began probing fresh session highs.
The noon hour”s exit extended higher, too, triggering the 2117.50 bias-up signal. It has been probed by almost 2 points.
I”ll give the rally every benefit of the doubt so long as its pullback limits hold. But that assumes the rally”s sponsorship is pretty strong-handed. Because two big parts of its template are suspicious.
First, gapping up through 2107.00-2108.00 would have been credible for recovering its resistance, but gapping up to it reacted down. Second, the later recovery above 2107.00-2108.00 held 2113.00 resistance through 10:15, undermining its sponsorship.
Be on guard for a reaction down, because almost any reaction down would likely be dramatic. Meanwhile, the rally”s momentum remains intact.
Look ahead: Economic Calendar – for Thu May 28 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday”s calendar is busier than it is influential. The pre-open Jobless Claims hasn”t influenced price action in awhile, and Bloomberg is irrelevant. Housing sector reports won”t be surprising, at least not enough to alter policy. And the afternoon”s Fed speaker probably won”t offer any surprises, either. Meanwhile, the 7-year is starting to get far enough out the yield curve that its auction could inhibit price action before the results.
John Williams Speaks
2:20 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
EIA Petroleum Status Report
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Narayana Kocherlakota Speaks
2:45 PM ET
Farm Prices
3:00 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 | 2120.00 | 2117.50 |
| …would target | 2126.25 | 2124.00 |
| Bias-down: under | 2111.25 | 2109.00 |
| …would target | 2105.50 | 2103.00 |
| 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… Hope springs (a leak)
The open gapped up to the 2106.75 bias-up signal, pierced 2107.00-2108.00 resistance, and promptly reversed down. Trending back down at all was likely to start quickly, but not without limitations. I suspected that already touching 2102.50 just 3 minutes later was scaring away more sellers than it was attracting.
Live by the Grexit, die by the Grexit, repeat…
In fact, price firmed back up to 2108.00. The price surged on headlines touting a deal nearing with Greece”s creditors. The 2113.00 bias-up target was probed up to 2115.75. Overbought RSIs there require its eventual retest.
Live by the Gre… Wait, no… Die by… I lost my place…
Choppy ranging was ultimately resisted by the 2113.00 bias-up target through 10:15, and the bias-up signal did not renew. Another headline has somewhat denied the earlier one.
Being a bias-up environment, extending higher remains possible, but that”s not common when the target was already met and held through 10:15. Still, back above 2114.00 would signal the recovery extending higher.
Be sure that”s not just a headline reaction, because otherwise price can quickly collapse after neutralizing the attraction back to overbought RSIs at the 2115.75 high. Regardless, the bias-up environment could dip to 2106.75-2107.50 without reversing momentum down.
Overnight strength has continued overlapping
Overnight strength has continued overlapping 2107-2108. Higher and higher highs have reacted back down under 2107-2108, so we can”t rely on gapping up to extend higher. And gapping up to 2107-2108 without extending higher would instead be likelier to trend back down this morning, and to probe yesterday”s 2096 lows by 2-3 points. Details were reviewed during the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/vsmrpxc