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Market Wrap (recording & summary)
It’s difficult for a river to rise higher than its source. Friday afternoon’s narrowing range tried at Sunday night’s open, rallying 5 points to attack Friday morning’s 2477.75 high. But it was retraced overnight, too. Monday morning held at unchanged, and the afternoon eked its way back up to the overnight highs.
All within a 4-point range. At least we were able to label it a “dry cleaners” morning, and to suggest more of the same (i.e. little of anything) that afternoon. The final hour’s entry wasn’t doing anything relevant, other than holding up at session highs. The proximity allowed an otherwise irrelevant blip-up to pierce 2478.00, which was being tested into the close.
Breaking free Tuesday from the range of failed gaps up could begin by trending up overnight. That would be just as vulnerable to another failure, however temporary. Starting from a narrow overnight range would be more capable of trending up intraday. But an opening dip — not too deep — could stretch the rubber band for a post-open surge. Only gapping down under Monday’s 2473.00 lows would be likely to trend down intraday.
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))
Although last week’s rally stopped short of its 1.1945-1.1970 potential, extending down Monday could have reversed the trend. Gapping up shallowly doesn’t prevent resuming the decline anyway, but it does start to suggest the highs will be tested as part of completing a top.
Gold Dec Contract (GC, ETF: (GLD))
Flat-to-lower ranging Sunday night persisted into Monday morning as the 1261.00 support fought to prevent at least filling near-term gaps below, let alone extending down into a deeper decline.
Silver Sep Contract (SI, ETF: (SLV))
Fresh lows Sunday night persisted into Monday’s gap down, which hovered in negative territory. No deeper pullback is required, but a deeper pullback is likely nonetheless so long as Tuesday’s open doesn’t gap up back above Friday’s close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Relatively narrow ranging Monday didn’t extend Friday’s reaction down, further suggesting that too little time was spent testing the high for it not to be retested regardless of the resolution.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-lower ranging avoided a fresh low, as well as the 48.25 sell signal, while awaiting at least a deeper pullback if not also a trend reversal.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Friday’s pre-open pierce of Tuesday’s 2.76 low didn’t fulfill its retest, and neither did Friday morning’s hovering just above the prior low. So, Monday’s pierce of Friday’s highs certainly didn’t complete the bottom, either. That said, a second higher close Tuesday would suggest a bigger bounce underway first.
Mid-day Update… Eking higher.
Dry cleaners morning not letting go.
Post-open action bounced around 2473.00-2475.75 before exiting the bias environment. Probing higher into the noon hour and out of it has extended up to 2477.00. Barely above the morning’s range, and still 2 ticks under the overnight highs.
Restrained optimism? Coiling? Probing fresh highs should be sudden, steep and substantial — almost literally exploding higher. Anything more timid would be suspicious.
Regardless, this afternoon is a no-bias environment again. Back under 2474.00 would now start to signal a probe into negative territory, whether or not brief or temporary.
Look ahead: Economic Calendar – for Tue Aug 8, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s on influential report is Jobs Openings, more so when it conflicts with Friday’s Employment Situation report. Ongoing OPEC meetings will be a wild card.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2480.75 | 2478.00 |
| …would target | 2486.75 | 2484.00 |
| Bias-down: under | 2475.25 | 2472.50 |
| …would target | 2469.75 | 2467.00 |
| Signal status: waiting for trigger | 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.