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The First Trade & Pre-open Tour Recording… All gone.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
A durable bottom all but requires probing under Wednesday afternoon’s 2907.50 plunge lows. That didn’t prevent Thursday’s open from gapping up to and through what had been “lower prior highs” at 2914.00, and extending above the critical 2919.00. Extending higher didn’t invalidate the downside requirement, either. And the extension was substantial, persisting through the bias environment, into and out of the noon hour up to 2932.00. Dropping 15 points from there down to 2917.00 expended a lot of selling pressure in a short time frame, and avoided closing under 2919.00. But Thursday afternoon’s sellers gained traction — exiting the bias environment under the noon hour’s low and entering the final hour even lower — keeping alive Thursday afternoon’s selling pressure into Friday morning.
Overnight action’s new info…
Thursday’s late bounce up to 2922.00 was immediately retested at the Globex open. It extended to within 1 tick of this morning’s 2924.50 bias-up signal. Things have changed greatly since then. An aggressive drop through Europe’s opens probed under yesterday’s afternoon’s low to 2915.00. Its reaction up has fallen to lower lows under yesterday morning’s low at 2911.75.
If, then… (notes to accompany the Tour recording)
Closing back above 2914.00 and (barely) 2919.00 creates a position of strength to help recover from lower lows. Which will be needed, because the traction gained by Thursday afternoon’s drop makes Friday morning likely to trend lower. Overnight lows are only now testing yesterday morning’s low, so the Isolation setup is probably moot. Meanwhile, probing under Wednesday’s 2907.50 low has room to 2900.75 while still being likely to recover 2914.00 and 2919.00 through the close. Closing much lower than that would threaten to extend deeper into next week.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2915.50 would be likely to trigger the 2916.25 bias-down signal at 10:15. Exiting the open above 2919.00 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2919.50 | 2924.50 |
| …would target | 2925.75 | 2930.75 |
| Bias-down: under | 2911.25 | 2916.25 |
| …would target | 2904.50 | 2909.50 |
| Signal status: LATE NO-BIAS, BIAS-DOWN SIGNAL TESTED | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Wednesday afternoon’s plunge to 2907.50 cannot form a durable bottom without being retested. We knew this at Thursday’s open, despite it gapping to and through what had been “lower prior highs” at 2914.00, and extending above 2919.00. This downside requirement continued despite extending higher through the bias environment, into and out of the noon hour. up to 2932.00.
And the downside requirement under 2907.50 remains likely, despite already dropping 15 points from Thursday’s high to attack 2917.00. That’s a lot of selling pressure to expend in a short time frame, and to still have downside. But Thursday afternoon’s sellers gained traction — exiting the bias environment under the noon hour’s low and entering the final hour even lower. Friday morning is likely to trend lower, if not isolated to the overnight.
Meanwhile, Thursday’s close did recover 2914.00 and (barely) 2919.00. Probing lower on Friday would originate from a position of strength. Whether done overnight or during the morning, a recovery is likely. Probing lower without recovering would instead point sharply lower.
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))
Thursday’s gap down and intraday downtrending is a breakout from the five-day multi-session range that had developed between 1.1815-1.1855. The 1.1735 last relative low was touched, which a second consecutive confirming lower close Friday would also break. Not extending down Friday would undermine the topping pattern, and instead be more likely to back-and-fill back to last week’s highs.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s close under the 1201.50 sell signal extended sharply lower Thursday morning to attack 1185.50, confirming the breakout. A 5-6 week old gap outstanding from 1184.50 could offer some obligatory support. But the drop is meanwhile targeting overnight lows to at least 1172.50.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s open gapped to and through 14.33, back down to the uptrending channel’s lower-end at 14.20. A second consecutive lower close on Friday would confirm a new downleg underway.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s FOMC statement was greeted at 140-04 and its reaction probed higher to 141-03. Thursday morning’s reaction to at least two high-profile econ reports erased the gain, and threatens to already end the corrective bounce and resume the decline.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Thursday back into the range helps to confirm Wednesday’s dip didn’t reverse the trend down, and that the 73.90-74.25 upside objective remains intact.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
[Rolling coverage forward to Nov, which trades at a 2-cent discount from Oct]… Wednesday’s drop from the 3.06 high down to 2.96 didn’t prevent greeting Thursday’s EIA report from a position of strength. Its reaction did surge, probing fresh highs to 1-cent above the 3.10 objective. Pullbacks must hold 3.00 as support to maintain upside momentum.
Mid-day Update… Maxxed out.
Limits of a corrective bounce are met.
The 2907.50 low of yesterday’s drop is likely to be probed at some point before a durable recovery develops. So, interim bouncing is likely to be only a temporary correction. A bigger and bigger bounce would start to suggest otherwise, but not arbitrarily — not without recovering some relevant level through a relevant window.
It helps to begin from a relevant level, too, like from recovering 2914.00 and 2919.00 through this morning’s open. Even that only produces a position of strength, which makes another drop likely to recover… for example, from retesting 2907.50.
Anyway, today’s bounce has extended through its 2927.00 renewed bias-up to attack this afternoon’s 2933.25 bias-up target. The probe above 2927.00 was isolated to the noon hour. And “late no-bias” just triggered for this afternoon’s bias environment.
Nothing requires extending this morning’s rally. Not extending higher would be vulnerable at least to backing-and-filling Extending higher anyway could retest Friday’s 2945.25-2947.00 highs, and still be vulnerable to reversing down.