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Daily Spot…
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 Mar Contract (EC, ETF: (FXE, UUP))
Wednesday afternoon’s surge up to 1.1545 in reaction to FOMC fulfilled the confirmed breakouts requirement for at least an eventual third higher close. Its optimal 1.1520 pullback limit was probed Thursday morning back down to the 1.1485 prior target. .
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s post-close surge in reaction to FOMC had fulfilled the rally’s next higher objective at 1326.50, and it was maintained overnight and probed above 1331.00. Thursday’s gap up to 1328.50 above all prior highs will need to be retested eventually from below.
Silver Mar Contract (SI, ETF: (SLV))
Already firming Wednesday afternoon ahead of FOMC, the rally persisted overnight to fresh highs that extended higher at Thursday’s open up to 16.20. The open’s 16.13 gap up above all prior highs will need to be retested eventually from below.
30-year Treasury Mar Contract (US, ETF: (TLT))
Resuming Wednesday’s late break without hesitation after the close extended higher overnight to gap up above 146-00 and extend further Thursday morning to 146-28. The confirmed breakout now requires there to be at least an eventual third higher close. Pullbacks must hold 146-08/1467-16 to maintain near-term upside momentum.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Ranging narrowly sideways overnight broke higher Thursday morning to 55.37. But the afternoon reversed down sharply back down to “lower prior highs” at 53.80, which Wednesday’s open had gapped up above. A deeper pullback must hold 53.30 to maintain the breakout’s momentum.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of strength, especially not after two consecutive sessions had printed fresh intraday lows. Falling back down to last Friday’s 2.80 low was redundant having been a test of early January lows. Closing above 3.05 is needed to indicate a bottom has formed, but the pattern is otherwise at risk of extending down.
Mid-day Update… Decision point.
Next higher objective met.
Consolidating around this morning’s 2695.00 bias-up target tried reversing down, after a violated pullback limit tried resolving up too quickly.
Both attempts failed. The rally resumed finally at the bias environment exit.
The next leg extended to 2708.00, slicing through the rally’s 2701.00 next higher target at noon. Price action since then has fallen back down to attack 2695.00.
Today’s upside momentum may have lapsed. Downside momentum hasn’t necessarily taken its place. Which might seem an odd conclusion, since this afternoon’s 2699.25 bias-down just triggered — albeit late. Sellers still get a benefit of the doubt, especially if the bias environment lapses under its 2699.25 bias-down signal or 2691.25 bias-down target.
Regardless, closing above 2701.00 would put into play the rally’s next objective at 2756.00. Only closing back under yesterday’s 2690.00 high would start to signal momentum reversing down more substantially.
Look ahead: Economic Calendar – for Fri Feb 1, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: It has become rarer through the years for the Employment Situation report to be released in a vacuum. But that has usually meant one and maybe two other reports following it. This Friday’s report is unusual for so many reports following it. Post-open, high-profile, reliably influential to price action, and three to be released simultaneously. Volatility should be unusually high for a Friday morning.
*Employment Situation
8:30 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
*Consumer Sentiment
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 | 2709.00 | 2707.75 |
| …would target | 2715.75 | 2714.50 |
| Bias-down: under | 2700.25 | 2699.25 |
| …would target | 2692.25 | 2691.25 |
| Signal status: LATE BIAS-DOWN | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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… Split personalities.
Early sellers were also late. Early buyers are already rewarded.
The open was greeted by two setups. A bearish Globex-flip was opening back under the earlier Globex low after having probed above yesterday’s high. A
nd a Too-late Globex breakout had just begun probing under the earlier overnight range. Triggering or rejecting either would be likely to be very productive very quickly.
The Globex-flip maintained its open under the 2681.75 earlier Globex low, but never extended under yesterday’s 2674.25 last relative low to confirm. The Too-late Globex breakout was retraced back to the earlier range, but wasn’t resuming its earlier breakout. The setups eventual rejections reversed back up sharply to probe the 2695.00 bias-up target by more than 2 points.
The reversal’s pullback limit was violated, and the rally tried resuming before bothering to form any complexity or accumulative behavior. That recovery is often unreliable, and it has reacted down 6 points to 2692.00. There’s room down to 2689.50 or 2688.00 before suggesting an even bigger dip underway.
Back above 2697.00 (being tested now) would start to signal the rally has resumed. A second consecutive higher close today would confirm 2701.00 is in-play — which could be tested while confirming, which would then suggest 2756.00 is also in-play. No second consecutive higher close, especially if 2701.00 were visited in the interim, could already reverse momentum down.