S&P
Overnight action didn”t extend Friday”s
Overnight action didn”t extend Friday”s plunge, but retraced it only partially. Now, last-minute action is at its highest level, piercing 2048.00. Exiting the open at 9:45 above 2050.50 would be credible for extending higher, but already recovering 2053.00 would be better. And now that 2048.00 is being touched, back under 2045.00 would suggest this last-minute optimism is ineffectual, needing to retest Friday”s low. It will all be over soon… Here”s the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/kfppwww
Look ahead: Economic Calendar – for Mon Apr 6 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Several more jobs data on Monday follow Friday”s surprise. If not for Friday”s surprise, then none of Monday”s jobs reports would have any likelihood of influencing price action. But something contradictory might get notice. The post-open ISM number is reliable for influencing price action.
Gallup US Consumer Spending Measure
8:30 AM ET
PMI Services Index
9:45 AM ET
Labor Market Conditions Index
10:00 AM ET
*ISM Non-Mfg Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET
Treasury STRIPS
3:00 PM ET
The First Trade… Guess it wasn’t just a bad dream.
Proper context can start the day with a solid win and make all the difference.
Enter the Chartroom here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Thursday”s session had tested 2063.00-2064.00 resistance early, holding there through the close while awaiting Friday morning”s Employment Situation report. It was a big miss, driving stocks down sharply with an early close just minutes away. Not that that the reaction wasn”t justified, as the Dollar fell sharply, too. But the impending illiquidity could only exacerbate matters. And oversold RSIs at Wednesday”s post-open low had required its retest, to at least 2039.00, which held Friday”s Globex close.
Overnight action”s new info…
Sunday night”s open surged to attack 2047.00. A dip back to 2039.00 was recovered to attack 2048.00. All of which is too shallow to suggest that Friday”s drop was just an anomaly. Relatively narrow ranging since then between 2043.00-2047.00 is now getting choppier — the past hour has surged to the range”s upper-end, and back down to its lower-end.
If, then…
Despite Friday”s plunge, gapping down Monday from Thursday”s close is extreme sentiment, and vulnerable to being a sentiment extreme. Opening under 2048.00 won”t be impossible to recover later, just difficult. That”s the bias-up signal, and recovering its 2054.50 bias-up target would be the earliest suggestion that Friday”s plunge was only temporary. And ended. Recovering from under Friday”s low would be possible, too, but less so if not already recovering into the bias environment”s exit.
First Trade…
Exiting the open at 9:45 under 2037.50 would be likely also to trigger the 2039.00 bias-down signal at 10:15. Exiting the open above 2053.00 would be likely to trigger the 2048.00 bias-up signal.
Morning Bias
NOTE: THE FOLLOWING PARAMETERS REPLACE THE EARLIER POST THAT WAS CALCULATED FROM THURSDAY”S CLOSING PRICES.
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2055.75 | 2048.00 |
| …would target | 2063.00 | 2054.50 |
| Bias-down: under | 2046.50 | 2039.00 |
| …would target | 2041.50 | 2033.75 |
| 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.
Perfect storm: payrolls, Grexit, early close
We monitored the Payrolls reaction in the chaRTroom this morning.
Overnight action had firmed to within 1 tick of 2064.00 resistance, but dipped to 2059.00 before the release. Its knee-jerk reaction spiked down to 2049 and back up to 2055.00. From this I calculated the maximum rubber band stretch to be 2046.00-2047.00, where either it snaps up to reward knife-catchers, or else it simply snaps to punish them.
And it didn”t snap up. A brief defense of 2046.00-2047.00 resolved down to touch 2039.00. Down 20 points under the pre-release low.
New sponsorship wasn”t responsible for pushing price lower. New sponsorship wasn”t even likely to suddenly arrive 20 minutes before the 9:15 ET close. Instead, it was the fast-approaching close which converted those knife-catching buyers into a mass of sellers. It”s called “capitulation.”
The last 10 minutes was actually a thorough test of Wednesday”s post-open low, whose oversold RSIs required its eventual retest. And that retest targeted at least 2039, which barely contained Friday morning”s Globex close.
None of which matters to the bigger picture. Not if Sunday night”s action retraces enough of Friday”s reaction, to greet Monday”s open from above 2054.50.
Retracing Friday morning”s plunge would at least keep alive the potential for one more new high before the bigger decline begins. Otherwise, the potential to fresh highs would depend upon absorbing the morning”s drop before the close. The alternative to rejecting or absorbing the drop is potentially very bearish.
REMINDER: No Saturday Reviews during holiday weekends. Please add any questions to this post”s comments section. The chaRTroom will be accessible for Sunday night”s Globex open… Have a very happy holiday weekend!