Bigger Picture
Pre-market Wrap… More lemons from lemonade.
The overnight rally to 1957.75 had been retraced already to probe negative territory under 1931.00-1933.50. Then it extended down to 1919.00, fresh lows under 1926.50 and 1924.00 (yesterday’s low and the overnight low, respectively). That also tested this morning’s 1922.75 bias-down target.
Before getting too bearish on all of that, let’s note that its reaction up has threatened the 1928.50 bias-down signal. Not holding 1926.50 through 9:45 would make it likely to trigger 30 minutes later at 10:15. So, recovering 1926.50 through 9:45 should be take seriously for its potential to rally sharply through the morning.
There’s nothing bullish about triggering bias-down. Details and other markets coverage were discussed during the pre-market Tour, recorded here:
https://roddavid10.mitel-nhwc.com/join/fbkymwy
Morning bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1950.00 | 1939.50 |
| …would target | 1955.75 | 1945.50 |
| Bias-down: under | 1938.75 | 1928.50 |
| …would target | 1932.25 | 1922.75 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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.
Daily Spot… Gold is gone.
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Sep Contract (EC, ETF: (FXE, UUP))
Wednesday’s gap down immediately began failing to exploit Tuesday’s firming, which had avoided confirming any prior breakout. Reversing up almost immediately does barely qualify as exploiting the recent stability. But there is no time left for a bullish pattern to delay extending higher.
Gold Dec Contract (GC, ETF: (GLD))
Having tested the 1125.70 bounce limit at Tuesday’s high, the decline was free to resume Wednesday, which it did aggressively by falling to new lows testing 1100.00. Extending under 1098.40 would require new lows under 1078.00.
Silver Dec Contract (SI, ETF: (SLV))
Still delaying the gap-fill back down to 14.35 despite Gold now tumbling makes the pattern even less decipherable, and less interesting to trade without it first resolving that issue.
30-year Treasury Dec Contract (US, ETF: (TLT))
Extending Tuesday’s 154-17 sell signal gapped down Wednesday to fresh lows testing 152-14. That was recovered as stocks fell, back into positive territory probing 10 ticks above the 154-17 sell signal. The sell signal was not confirmed, but retesting Wednesday’s gap open at 153-14 would help a recovery attempt to extend higher intraday.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sliding only slightly Wednesday to 44.10 still managed to probe under Tuesday’s low. Now there’s a timing requirement to begin probing fresh highs above 50.00, as any aggressive weakness Thursday would be credible for extending down.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Still bouncing within its recent narrow range is greeting Thursday’s EIA report from the range’s lower-end, but still within the range. That’s still not an enviable position of strength, unable to avoid an initially negative knee-jerk reaction down. But recovering a reaction down that originated within the channel would help to form a bottom.
Look ahead: Economic Calendar – for Thu Sep 10 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is busy, but not very influential. Pre-open Claims has gotten a track record of having no influence, at least not without being a surprise. The afternoon’s 30-year auction will be interesting with the bond having fallen recently and dramatically to fresh lows.
*Jobless Claims
8:30 AM ET
Import and Export Prices
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Wholesale Trade
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
EIA Petroleum Status Report
11:00 AM ET
*30-Yr Bond Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Post-open Review… Putting it off for later.
Resuming the rally immediately post-open would have been credible for extending higher throughout the morning. Backing-and filling to lower levels was unlikely to begin quickly. Ranging around the 1986.00 open barely managed an errant tick above 1987.25 before reversing down sharply.
The reversal down extended. And extended. Despite having probed it overnight by 16 points, this morning’s 19676.25 bias-up target was being tested as support at 10:15. The bias-up signal was not renewed. And now the 1968.50 bias-up signal is being tested as support by 1 point.
Yesterday’s gap up reacted down, too, but held well above the prior session’s range. This morning’s reaction down has tested yesterday’s highs. Can today’s reaction down still recover to probe the 1992.00 overnight high like yesterday? That’s still the premise, since yesterday’s buyers gained traction for their effort.
And now rewarding them this morning makes an afternoon reward likely. Exiting the bias environment under this morning’s 1968.50 bias-up signal would invalidate that reward.