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Market Wrap (recording & summary)
This Tuesday’s reaction to the latest N. Korea missile was decidedly different than last Tuesday. Post-open action didn’t rally, and overnight lows were probed. At least recovering to close back above the 2460.25-2461.25 overnight lows could have isolated intraday sellers, but they proved too strong-handed. And that was despite having trended up since exiting the noon hour off of 2445.50. An uptrend that nearly fulfilled an attraction to “higher prior lows” at 2461.00.
So, expending buying pressure all Tuesday afternoon, nearly fulfilled its potential, holding resistance without trapping any shorts. As suspected before the open, rallies would be inhibited. As suggested at the close, it’s not just weak hands that are inhibited.
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 Sep Contract (EC, ETF: (FXE, UUP))
Gapping up Tuesday preserved Friday’s dip that had held within the maximum pullback limit, keeping in-play the potential for retesting last week’s highs.
Gold Dec Contract (GC, ETF: (GLD))
Gapping up Sunday night to fresh highs at 1339.50 on the weekend’s N. Korea missile news had extended momentarily to touch 1345.50, which was attacked Tuesday after an interim dip stopped optimistically short of touching last week’s 1331.00 “lower prior highs.
Silver Dec Contract (SI, ETF: (SLV))
Sunday night’s gap up on the N. Korea news immediately fulfilled the outstanding.17.90 target, eventually probing it to attack 18.10. Gapping back down Wednesday under 17.75 would form an Island.
30-year Treasury Dec Contract (US, ETF: (TLT))
Closing under the rally’s 155-10/155-20 pullback limit Friday was actually still overlapping it, so it wasn’t credible. Gapping up Sunday and extending sharply higher Monday pierced last week’s 156-28 overnight high up to 157-00. There is no “unfinished business above,” and room for a pullback down to 155-26/156-00 before reversing the trend back down
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up through the 47.95 bounce limit extended to attack 49.00. Closing above.48.95 would signal the trend has reversed up. That was already suspected when last week’s low came within a dime of the 45.50 target and held a pullback to 46.60. Closing under 47.75 would reinstate downside momentum.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Thursday’s confirmed breakout above 2.98 now requires at least an eventual third higher close. Meanwhile, gapping down Tuesday back down to 2.98 would reinstate potential to 2.84 under 2.95. Back above 2.98 would reinstate last week’s confirmed breakout.
Mid-day Update… Extra fallout.
Renewed bias-down target met.
Selling had resumed at noon and plunged through the 2461.50 afternoon bias-down signal to its 2455.50 bias-down target. And lower, through the afternoon’s 2448.00 renewed bias-down target to 2445.50. All before the bias timing window even triggered.
In fact, that was greeted by a 6-point bounce to 2451.50. Still renewing the bias-down signal, but holding a test of the renewed bias-down target.
That bounce didn’t extend, which another dip is now attempting. The initial dip’s reward would have been 2455.50. Now its potential could be much more substantial.
Back under 2448.00 would instead signal the decline is resuming. And resuming the decline at this stage would put into play 2432.00 and 2419.50. So, not only containing the decline but also reversing its momentum back up could be the last defense against a very bad week.
Look ahead: Economic Calendar – for Wed Sep 6, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar isn’t light, but its only reliably influential item is the afternoon’s Beige Book. Meanwhile, the morning’s two post-open services / non-mfg items could have an impact if both were to surprise.
Robert Kaplan Speaks
Tue 7:00 PM ET
MBA Mortgage Applications
7:00 AM ET
International Trade
8:30 AM ET
Redbook
8:55 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
*Beige Book
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2468.50 | 2467.50 |
| …would target | 2473.75 | 2473.00 |
| Bias-down: under | 2462.25 | 2461.50 |
| …would target | 2456.50 | 2455.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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.