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Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2445.50 | 2443.25 |
| …would target | 2452.50 | 2450.50 |
| Bias-down: under | 2438.25 | 2436.25 |
| …would target | 2433.00 | 2430.75 |
| Signal status: noN-BIAS, STILL TESTING BIAS-UP SIGNAL, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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)
Gapping down Thursday under Wednesday afternoon’s ~2463.00 low formed a “session-long decline” setup, which was confirmed by extending down through the open. All but one timing window probed the prior timing window’s low, the exception being the afternoon bias environment. It completed a bounce from 2442.75 to 2453.75. The balance of the session melted down to 2435.75.
That’s 36 points under Wednesday’s 2471.75 close, and 53 points under Tuesday’s 2488.50 high.
Thursday was also a breakout close. Tuesday’s temporary surge had closed back under the range’s upper-end, and Wednesday’s break had ranged choppily around its lower-end. A second consecutive lower close Friday would confirm the breakout, and require an eventual third lower close. Not closing Friday back above 2459.50 would also require an eventual third lower close. That was the interim low under which Thursday’s close has formed a trend reversal setup.
The next lower objective is 2425.25, likely to be probed by at least 4 points. Any post-open weakness Friday would likely fulfill it intraday. Or, Friday’s open may gap down under it and extend deeper into the weekend… and out of it. Of course, lower lows may be avoided altogether — albeit temporarily — by avoiding any post-open weakness.
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))
Still hovering at the 1.1730 “lower prior highs” isn’t necessarily tantamount to holding the test, especially when the test is a retest that strong buyers would have resolved up much sooner. .
Gold Dec Contract (GC, ETF: (GLD))
Avoiding a corrective dip to 1271.00, an overnight rally triggered a gap up Thursday through 1285.00 that extended higher through the morning to attack 1294.00. Upside momentum remains intact for extending to 1305.00 so long as 1285.00 holds as support. Under 1281.50 would signal momentum reversing down.
Silver Sep Contract (SI, ETF: (SLV))
Extending higher overnight without a pullback to 16.60 gapped up to test the 17.20 target and then react down to 17.05, which must hold as support to maintain the upside momentum.
30-year Treasury Sep Contract (US, ETF: (TLT))
A retest of Wednesday’s 155-08 high found its catalyst in the flight-to-safety that was triggered Thursday morning. Its resistance initially produced a reaction back under the 154-30 pullback limit. But more afternoon turmoil enabled an attack on the highs to avoid sealing a top instead, and to launch an extended upleg.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Ignoring turmoil elsewhere since last week had created an extended narrowing range, a pattern which tends initially to break falsely in one direction before reversing more substantially in the opposite direction. Thursday’s gap up attacked the rally’s 50.10 target and immediately began reversing down back down to the range’s lower-end, just above the 48.25 sell signal.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Having sealed a bottom two days prior, Thursday’s EIA was greeted from a position of strength. Not so much as to preclude a knee-jerk reaction down from retesting the low, but to make that dip likely to recover into a rally. No test or recovery was needed, as the reaction spiked up and extended to fresh recovery highs attacking 3.00.
Mid-day Update… Gathering its thoughts.
Noon hour lows not extending.
Failing to absorb the open’s dip meant trending down through the morning. And probably also the noon hour. The morning bias environment did lapse at fresh session lows around 2447.00. The noon hour probed down to 2442.75. And now the afternoon bias environment is being entered back above 2447.00 up to 2450.00.
Are sellers done for the day? Having held the 2446.00 bias-down signal instead of triggering it, there’s no bias-down target in-play. And this morning’s doubly-renewed 2445.75 bias-down target was already tested. But until today’s series of lower lows and lower highs is reversed, the pattern will remain vulnerable to resuming the decline.
Back above 2452.00 would suggest a bigger bounce is forming. But under 2447.00 could probe fresh session lows, even during the no-bias environment.
Look ahead: Economic Calendar – for Fri Aug 11, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday morning’s CPI is reliable for influencing price action, and it’s high-profile. The two morning Fed speakers could influence price action, too, but neither has the strongest track record.
*Consumer Price Index
8:30 AM ET
*Robert Kaplan Speaks
9:40 AM ET
*Neel Kashkari Speaks
11:30 AM ET
Baker-Hughes Rig Count
1:00 PM ET