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Market Wrap (recording & summary)
Monday’s open was greeted back down at the 2729.00 earlier Globex low, after having probed most of Friday’s prior highs. Extending down through the open would have been bearish. The open held up, but didn’t reject the test. The morning resolved down anyway. The WedEX’s nominally bearish influence from Friday was followed by an aggressive morning-long decline into the 2686.50 noon hour low.
A reverse / expanding triangle began forming through the afternoon bias environment, its resistance tested twice at 2698.00, and its third low being 2691.50. No traction was gained, and the proxy window’s attempt to reverse up barely held before reversing back down to the noon hour’s 2686.50 low.
To the extent that the Globex-flip is influential, failing to recover Monday morning’s decline suggests it will extend down through Tuesday morning, too. The next lower major objective is 2754.25. Otherwise, back above 2706.75 would start to signal momentum reversing up. Meanwhile, last Thursday’s potential bottoming pattern is desperately in need of further confirmation by closing above a prior high.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
The 10-day old gap back to the high’s session’s 1.1490 close was filled at Monday’s highs after gapping up and trending higher intraday. There is no bearish reason to extend any higher, so reversing back under 1.1425 would signal a new downleg underway.
Gold Dec Contract (GC, ETF: (GLD))
Flat ranging overnight never resolved in either direction Monday, which also means the bounce limit’s test wasn’t rejected back under its 1220.50 sell signal.
Silver Dec Contract (SI, ETF: (SLV))
Flat ranging overnight firmed slightly intraday Monday, still vulnerable to resolving down and erasing last week’s rally.
30-year Treasury Dec Contract (US, ETF: (TLT))
Dipping overnight to test recent sessions’ 139-08 “lower prior highs” held its test through Monday’s open and returned up to Friday’s highs at 139-30, capable of extending the rally.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s rejection of its opening gap extended down Sunday night and Monday morning to retest last Tuesday’s plunge low as the pattern required. But only a retest of its 55.75 intraday low, and not of its 54.90 overnight low. The afternoon’s bounce up to 56.95 can get a benefit of the doubt for extending higher if confirmed Tuesday by a second consecutive higher close.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Already rallying Sunday night has truncated a healthier pullback, making a gap-fill back up to Wednesday’s 4.82 close likelier to hold and complete a top. Monday’s gap up extended to attack the gap to within a nickel.
Mid-day Update… Pessimism slowing.
Clinging to fresh lows.
The morning’s aggressively bearish influence persisted through the bias environment lapsing into the noon hour’s 2686.50 low. The drop from the 2731.25 open had tried bottoming once from 2706.50 before extending in another downleg.
Ranging relatively narrowly sideways since then is now entering the afternoon bias environment back at session lows. And testing this afternoon’s 2691.00 bias-down signal. Triggering the grace period at 1:20 has avoided resolving down, still overlapping the bias-down signal at 1:30 instead of triggering.
This is not a no-bias, whose lower-end should be defined by its bias-down signal. It’s also not a bias-down that should test its bias-down target.
However, its 2784.25 bias-down target was met anyway. And so far, it is holding. Having originated from a relatively narrow range, it’s easier to reject and recover the break, which would be signaled back above 2792.50 (being tested now). There’s otherwise no requirement to reverse or to extend.
Look ahead: Economic Calendar – for Tue Nov 20, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The holiday-shortened week is pushing most of the high-profile reports into Wednesday. Tuesday’s two pre-open reports have no reliable track record for influencing price action.
Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
8-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2704.25 | 2705.25 |
| …would target | 2711.25 | 2712.25 |
| Bias-down: under | 2690.25 | 2691.00 |
| …would target | 2683.50 | 2684.25 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| 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.