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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 Dec Contract (EC, ETF: (FXE, UUP))
Rallying overnight and gapping up to test 1.1400 was reversed down through the morning to test negative territory, potentially to produce a second consecutive lower close that confirms the sell signal which began breaking last Tuesday.
Gold Dec Contract (GC, ETF: (GLD))
Sunday night’s bounce held 1228.50 to reverse back down Monday morning. But the 1220.50 sell signal continued to hold, as it had during the two prior sessions.
Silver Dec Contract (SI, ETF: (SLV))
Rallying Sunday night above the 14.32 sell signal was erased by Monday’s open, and its reversal extended into negative territory through the morning.
30-year Treasury Dec Contract (US, ETF: (TLT))
Friday’s failed probe above Tuesday’s prior highs continued reversing down Sunday night, testing the 139-22 sell signal near Monday’s open. Holding its support maintains the rally’s potential to extend.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up and firming Monday morning was shallower than the two prior plunges’ immediate reactions, suggesting that pessimism may be reaching levels capable of forming a bottom. Regardless, no recovery would be credible for completing a bottom without first probing under Friday’s 50.15 lows intraday.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Thanksgiving lows didn’t qualify for triggering the 4.38 sell signal. But their reaction up stopped short of triggering the 4.59 buy signal before gapping down Sunday night to probe fresh lows at 3.99. A second consecutive lower close Tuesday would confirm.
Mid-day Update… Backing-and-filling anyway.
Noon hour probes under open’s low.
Reacting down from the open’s 2671.75 high had met its 2662.75 objective. And bounced. But the bounce never probed higher, while lower and lower lows have probed fresh post-open lows down to 2652.50.
Backing-and-filling through the morning was likely, and unlikely to damage the recovery’s chart. Having held a test of the afternoon’s 2655.25 bias-down signal, a lower low could now damage the recovery’s chart. Meanwhile, the no-bias window has room up to its 2668.25 bias-up signal before signaling the recovery has resumed.
A recovery could still resume from a deeper pullback. Fresh lows still have room down to 2646.00 and 2639.50 before signaling the recovery failed, and that the decline is resuming.
Look ahead: Economic Calendar – for Tue Nov 27, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is busy with Fed speakers, from one pre-open to three as the afternoon bias environment begins lapsing. The pre-open econ reports aren’t reliably influential to price action, but any reaction would likely be duplicated by the post-open report.
Richard Clarida Speaks
7:45 AM ET
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
FHFA House Price Index
9:00 AM ET
*Consumer Confidence
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
8-Week Bill Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
*Raphael Bostic Speaks
2:30 PM ET
*Esther George Speaks
2:30 PM ET
*Charles Evans Speaks
2:30 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2668.50 | 2668.25 |
| …would target | 2675.00 | 2674.75 |
| Bias-down: under | 2655.25 | 2655.25 |
| …would target | 2648.25 | 2648.25 |
| Signal status: NO-BIAS, BIAS-DOWN SIGNAL TESTED | . | |
| NEW: 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… The upper-end.
Post-open rally tests Wednesday’s highs.
The overnight rally up to 2666.00 ultimately corrected pre-open down almost 11 points to attack 2655.00. The open wasn’t greeted much higher, but it had soon surged back up to 2666.00. And then higher to attack 2672.00, essentially Wednesday’s highs.
The upper-end of the range. Resistance.
Another tick higher to 2672.00 would have allowed a higher pullback limit and sell signal. Another minute higher would have made a pullback likely to persist through the morning. But the minimum likely retracement target was met anyway in an attack on 2662.00.
The pullback could extend lower and persist longer, but neither is necessary. Regardless, the test of Wednesday’s high is getting a benefit of the doubt for forming a bullish base. While not helpful, a deeper pullback could test 2646.00 or 2639.00 before signaling last week’s decline has resumed.