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Post-open Review… Backing-and-filling.
No gaps, no give, no go.
Gapping up isn’t necessary to rally this morning,, or even this afternoon. The weak open merely needed to avoid being or becoming too weak — stay away from yesterday afternoon’s low, at least through a relevant timing window.
That’s where we are. The pre-open high at 2474.50 reacted down into and out of the open, extending to 2468.50 before both 1-minute and 3-minute RSIs diverged positively. That didn’t have to bounce, but it has, attacking the 2473.00 open.
The probe above yesterday’s highs may soon be underway. Not much higher would make that very likely. Meanwhile, back under 2470.00 would signal a move to fresh lows at 2466.50.
The First Trade & Pre-open Tour Recording… Back up, to unchanged.
Proper context can start the day with a solid win and make all the difference.
NEW 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…
Wednesday’s open gapped up for a third consecutive session, the sixth of the past seven opens, and the shallowest of them all. Narrow overnight hovering at or above Tuesday afternoon’s 2474.00 upper-end reflected only obligatory enthusiasm for AAPL’s earnings. The open soon became disappointed at the ineffectual optimism, and plunged 12-1/2 points to the bias environment’s low at 2463.50 support. The balance of the session rallied back up to touch the 2475.75 open into the close. Buyers gained traction for their efforts.
Overnight action’s new info…
Globex gradually pulled back to 2470.00 in retracing Wednesday afternoon’s bias environment exit. Consolidating was interrupted by Europe’s opens which triggered a dive that touched this morning’s 2467.75 bias-down signal. Its support triggered a recovery back up through the earlier consolidation, to touch yesterday’s 2473.50 futures settle — unchanged for the night.
If, then…
Gaining traction during yesterday’s recovery suggests this morning will rally out of the open. Which doesn’t preclude the open from gapping down. Only backing-and-filling through the morning could delay the rally until the afternoon. Some window Thursday should probe fresh relative highs, so long as Thursday’s open doesn’t gap down into a reversal signal — such as, gapping down to and through yesterday afternoon’s 2466.00 bias environment low, which would invalidate Wednesday’s recovery traction. Although not required by a rally, gapping up would be helpful.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2470.00 would be unlikely to trigger the 2467.75 bias-down signal at 10:15. Exiting the open under 2473.50 would be unlikely to trigger the 2475.25 bias-up signal.
Phonetic dictation…
good morninggood morning and welcome it is Thursday at 7 for Thursday’s Morning Market to her a whole lot of nothing last night which is not good for our purposes trying to get a handle on the open or sing Witch Way the markets leaning it’s really interesting overnight the low ride here 20 for 6775 is this morning’s bias down signals we’ve been to this morning’s bias down signal often not often enough to make a requirement out of it but tendency if sellers don’t retake control through the open the bias up signal typically is also tested at some point on this early on pre open and doesn’t necessarily hold but if this doesn’t repeat then and if we get no bias this morning is still reason out there and historical reason out there to anticipate touching this morning’s bias up signal 7525 so there’s that maybe there will be more maybe yesterday’s plungis is opening plunge remember it is really didn’t do it justice and pointing out that it was this week’s third plunge or opening slide or morning slide whatever it was really the second if not third reaction down from gapping up the sixth reaction out of the last 7 sessions really where the little different range so I’m not giving this this week’s series of gaps up failed as a maybe regardless of whether they did fail not giving them the same labeler the same sponsorship as last week’s failed gaps up those were in a rage with the first one but that’s what they are I’m in a lot of that is being sold in to quickly not during the Challenger job cut report following uses ATP and before tomorrows employment situation report that’s at 7:30 and then at 8:30 and couple of items including jobless claims 945 on Bloomberg which is irrelevant PMI Services which isn’t much more influential 10 Factory orders and I assume non-manufacturing index I know usually read the list but just to point out a lot of recognizable names but none of them are really influential the price so it’s going to have to be organic maybe there’s a reaction but we know that’s not what makes the brake on Monday can I buy a little that is 7910 essentially seems a little much but as well if it leaves unfinished business above by gapping down under 79 then we’ll know just to correct a dip is underway otherwise lower end of the range legal the Gap from one end of the range to the other end of the range and extend so at least the bounce to 7940 is likely silver and gold both yesterday I had levels 1660 in silver which is better pull back with it but if that point having pulled back overnight you can’t see it in here and there is and bounce to fill the Gap back to Monday’s close at that point there was no bullets reason to return to 1660 a return to 1660 not that 1660 was in a cell signal that just told us what the character in the context was in the Gap back to Tuesday’s close was filled we’re going to look at the same thing and gold sort of but in principle and what did that mean I mean ignore that prior to that but there’s that bounce up just for having touch 1660 and overnight dropping even deeper got to get above 1685 to suggest we pull back is recovering into a rally same thing on gold to a little bit different but the level was 12 71 72 it didn’t have to react to support in fact it was broke down to 69 almost you know left out back to Tuesdays clothes and had to be filled but just because that Gap fill originated from 1271 test said that the Gap would hold the shallower dip before being attracted back up to Tuesday’s close would have likely extended higher well in fact because 1271 originated the Gap the recovery to Tuesday’s close that told us the domino effect we’re going to look for brake to 1261 there’s the balance and you can see the inflection right there can get to 1261 yet but that’s essentially app that lower and and now it has the same 61-62 has the same influence as does 12717 to it Rite Aid indicating that it had bottom according to the parameters we’d already laid out so not really a detour so much as a round-trip of that interim high is exceeded not just retested there’s something much more substantial and away and we’ll talk about that at the time if then arises crude oil and changed new for it although it hasn’t been very volatile but it did nearly avoid the cell signal 4825 yesterday and the natural gas greeting eia and it’s stronger but not for the position of strength it’s an interesting-looking inverted Head and Shoulders at the low and really this in the inverted Head and Shoulders doesn’t include this part of the pattern so much which now must break higher but had sloping shoulders so not greeting the eia report from a position of strength even though price is stronger because of bottoms not complete Sony jerk reaction down or that holds a test of the prior low or doesn’t hold the test I need you to create action up likely to fail likely to reverse back down to complete a bottom and that inverted Head and Shoulders does open the door to initially reacting up doesn’t have to be a lot could be a lot daddy could be a whole lot but need York reaction up likely to resolve them and possibly to form a more durable bottom .
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2478.25 | 2475.25 |
| …would target | 2484.00 | 2481.25 |
| Bias-down: under | 2470.50 | 2467.75 |
| …would target | 2464.50 | 2461.50 |
| Signal status: NO-BIAS | 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)
Buyers gained traction for their efforts Wednesday. Exiting the afternoon bias environment above the noon hour’s high and then entering the final hour even higher is combined to signal that Thursday morning will trend higher. With two caveats. The signal could have been invalidated by trending back down through the 3:10-3:20 proxy window. Thursday’s open could be greeted by a reversal signal like gapping down under the afternoon’s 2466.00 low (which would also form a “session-long decline” setup).
The first exception didn’t happen, but the second setup might. Wednesday morning’s post-open slide was the third consecutive. Pavlovian conditioning would suggest the market is anticipating a fourth post-open slide on Thursday. That makes the prior timing windows vulnerable to sliding. It didn’t happen late Wednesday, leaving it to the overnight.
Avoiding an overnight drop would be likelier to absorb a morning dip, at least retracing it to unchanged if not also reversing it to an afternoon rally. Gapping up isn’t necessary to rallying tomorrow, but it’s the likeliest defense against the overnight downside risk.
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))
At least probing fresh highs remained likely, if not actually a new high close. Overinght strength was retraced before Wednesday’s open, but then probed through the morning to attack the 1.1945-1.1970 objective.
Gold Dec Contract (GC, ETF: (GLD))
Overnight weakness extended into Wednesday’s open and tested the 1271.00 support before reacting up to nearly fill the gap back at Tuesday’s 1279.60 close. Just having touched 1271.00 suggests the gap fill will hold, and that a new reaction down will test 1261.00 and lower.
Silver Sep Contract (SI, ETF: (SLV))
Dipping overnight and into Wednesday’s open tested the 16.60 pullback limit down to 16.45. Its reaction up barely filled the gap back to Tuesday’s 16.77 close. Closing above 16.85 would signal another rally leg underway, but meanwhile closing under 16.60 would be bearish.
30-year Treasury Sep Contract (US, ETF: (TLT))
Overnight weakness was recovered into Wednesday’s open and extended to fresh recovery highs at 154-18, which was retraced back to unchanged around 154-00.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The pessimistic reaction to Wednesday’s EIA report didn’t probe any deeper than had Tuesday’s reaction down from retesting the 50.10 target. Closing under 48.25 would signal the rally having ended so that a new pullback could begin.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Retesting Tuesday’s fresh low and holding it would have avoided greeting Thursday’s EIA report from a position of weakness. Also closing above their interim bounce high would have greeted EIA from a position of strength. Wednesday only ranged narrowly, suggesting either a knee-jerk reaction down to fresh lows regardless of its recovery, or a knee-jerk reaction up that fails.