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Market Wrap (recording & summary)
Monday night’s rally had formed a “new Globex trend extreme” at 2853.00 and gapped up to 2849.75. The balance of the morning ranged choppily sideways down to 2845.00. 
The bias environment lapsed by surging 15 points to attack 2859.00 as noon began.
Finally, some intraday trending. Apparently, trending by the same intraday sponsorship that had failed to uphold Monday morning’s probe above Friday’s highs. The rally was already fading to 2853.00 when a China trade headline triggered a collapse to 2841.50. A bounce to 2852.00 returned to session lows as the bias environment began lapsing.
Sellers had not gained traction through the bias environment exit and final hour’s entry. But the 3:10-3:20 proxy window trended down to fresh session lows, a combination that usually produces dramatic follow-through at some point before the close. In fact, the position-squaring window quickly tested 2829.00. The close bounced back up to 2840.00.
Tuesday’s gap up was filled by the China trade headline’s reaction, after barely touching Monday’s range. It is not “unfinished business.” More significant may be the two consecutive sessions of distribution ahead of Wednesday afternoon’s FOMC events, which suggests a very opportunistic trading environment.
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 Mar Contract (EC, ETF: (FXE, UUP))
Overnight strength again attacked 1.1450 while overlapping Monday’s highs, allowing the sell signal to be raised to 1.1405 from 1.1380. The timing no longer tolerates delaying a break lower.
Gold Apr Contract (GC, ETF: (GLD))
Gapping up above Monday’s highs pierced last week’s intraday highs, but stopped short of the overnight attack on 1312.00. The restrained optimism is potentially bullish from a contrarian perspective.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s gap up was still contained within Monday’s range and fluctuating narrowly around the 15.40 buy signal. Almost any initial strength on Wednesday would be credible for extending higher intraday.
30-year Treasury Jun Contract (US, ETF: (TLT))
If not still overlapping the 146-00 buy signal into Tuesday’s open, then the few ticks of strength at least lacked momentum. Which the morning exploited by sending price back down to the 145-16 sell signal. But already having delayed the reaction down, only now testing the sell signal should hold as support and avoid triggering through the close. Regardless, back above 146-00 would tolerate no delay in extending higher if valid.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs pierced the 59.50 room for noise above 59.25 that must be recovered through the close to confirm the rally’s momentum remains intact. Having tested 59.50, closing back under 59.25 would not greet Wednesday’s EIA from a position of strength. But a downleg would be signaled back under 58.40.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Surging overnight through the 2.84 buy signal pierced prior highs by 1 penny up to 2.89. A second consecutive higher close would confirm a new upleg is underway.
Mid-day Update… Fair-weather friends.
Intraday buyers bailing again.
The open’s sell signals didn’t stick and the 2847.75 bias-up target was exceeded at 10:15 to renew the bias-up signal. The 2853.50 renewed bias-up target was attacked to within 3 ticks neutralizing it.
The 2853.00 “new Globex trend extreme” was not actually touched. Another downdraft tried to trigger a sell signal. It was productive down to 2844.75, but still contained to within its first 3 minutes.
And then time ran out, as the bias environment came within view of lapsing in 10-15 minutes. It began lapsing at 11:30 back at the 2849.75 open, ready to face the consequences of multiple failed attempts to break lower during a relevant timing window — to reverse direction aggressively. So, the morning’s 2857.00 renewed bias-up target was being probed to within 1 tick of 2859.00 into the noon hour.
Quickly fulfilling an aggressive consequence doesn’t make that aggressive consequence’s sponsorship strong-handed. The burden of proof was once again on intraday buyers. Yesterday morning’s buyers were absorbed, and the afternoon buyers had gained no traction. Today’s intraday rally was retraced 6 points to natural support at the 2853.00 overnight high.
Just in time to be extra vulnerable to exacerbating the reaction to a China trade headline. It triggered a plunge back down to the morning’s 2841.75 bias-up signal. And now the plunge has been retraced by 61.8%, like most headline-triggered plunges and surges, to attack 2852.00. The 2851.00 bias-down signal has held to trigger late bias-down.
Now two intraday rallies seem to have been sponsored by weak hands. The distribution ahead of tomorrow afternoon’s FOMC events suggests at least a very volatile reaction.
Look ahead: Economic Calendar – for Wed Mar 20, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Bond market volatility within a range is greeting Wednesday afternoon’s FOMC events. Along with stocks at their highest recovered levels. No other influential or high-profile econ report is scheduled, so the statement and Q&A should be very opportunistic for trading opportunities.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Policy statement
2:00 PM ET
FOMC Forecasts
2:00 PM ET
*Fed Chair Q & A
2:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2853.25 | 2859.00 |
| …would target | 2861.50 | 2866.25 |
| Bias-down: under | 2845.25 | 2851.00 |
| …would target | 2838.75 | 2845.50 |
| Signal status: LATE BIAS-DOWN, TESTED BOTH BIAS-DOWN PARAMETERS | . | |
| 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.