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Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2479.25 | 2476.50 |
| …would target | 2485.25 | 2482.50 |
| Bias-down: under | 2471.50 | 2468.75 |
| …would target | 2466.25 | 2463.50 |
| Signal status: INVALIDATED 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)
Tuesday’s second consecutive failed gap up held a test of its bias-up signal, putting into play an offsetting test of its bias-down signal. Monday’s similar setup had quickly extended down to neutralize the attraction, and bottomed before the bias environment was within view of lapsing. Tuesday’s instance left the objective outstanding (at 2465.00) and printed a later low as the bias environment began lapsing at 11:30.
It’s not a small difference, leaving unfinished business outstanding. It helps one day’s accumulation or distribution survive overnight. And so long as the intraday action didn’t trend away, price is still in the objective’s orbit and likely to fulfill it.
In Tuesday’s case, the narrow afternoon range makes the next leg likely to compensate for its delay. So, trending down to 2468.00 would likely be steep, and potentially deeper than the objective. If the narrow range was due to inhibition ahead of AAPL’s post-close earnings — which reacted up sharply, despite greeting the news from a position of weakness — then resolving up should begin by gapping up sharply.
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))
Flat-to-lower ranging overnight and Tuesday morning doesn’t threaten the upside momentum, which should still at least probe fresh highs intraday. Fresh highs have room up to 1.1955-1.1970.
Gold Dec Contract (GC, ETF: (GLD))
Shallow overnight weakness was recovered by Tuesday’s open to extend the rally through the morning. Dipping back down to 1271.00 would target 1261.00 and likely reverse the trend down. Otherwise, the trend is next targeting 1303.00.
Silver Sep Contract (SI, ETF: (SLV))
An overnight dip filled gap back down to Friday’s close and reacted up to attack Monday’s highs Tuesday morning. Closing above 16.85 would signal that the rally was resuming, and pullbacks must meanwhile hold — if not also avoid altogether — a test of 16.60.
30-year Treasury Sep Contract (US, ETF: (TLT))
Initially dipping to within 1 tick of the 152-08 sell signal expended all available selling pressure without gaining any traction for the effort. Surging sharply back up through the already-triggered 152-26 buy signal and through the decline’s 153-16 inflection point was extended to attack 154-00. Wednesday has no excuse not to extend the rally further.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Re-testing 50.10 overnight reacted down Tuesday to attack 48.25, which had been the target’s pullback limit but is now the sell signal.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Firming Tuesday morning doesn’t signal whether Monday’s plunge was a one-day wonder, but it shouldn’t prevent at least retesting Monday’s low in even the most bullish scenarios.
Mid-day Update… Dragging it out.
Fighting the downdraft.
This morning’s failed gap didn’t resolve very differently from yesterday’s. Post-open action collapsed, immediately instead of being delayed. And the bias environment contains the low, albeit a half-hour later. But these distinctions are not differences. So, the second consecutive failed gap should still deviate its course from yesterday’s path.
Which probably means either recovering to rally through the afternoon, or else resuming the decline. The latter is likelier since this morning left “unfinished business below” at 2465.00. There’s one bullish element: This session has traded almost exclusively in positive territory. Still, this afternoon has triggered no-bias, so rallying won’t be credible until breaking above its 2476.50 bias-up signal through 2:30.
Meanwhile, back under 2472.00 and 2469.00 would signal the post-open decline had resumed. And the timing at this stage of the pattern would be difficult to prevent fresh session lows from extending.
Look ahead: Economic Calendar – for Wed Aug 2, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Reaction to Wednesday’s pre-open ADP offers an opportunity to start fine-tuning expectations for Friday’s payrolls report. Meanwhile, two Fed speakers have interesting times for their lower liquidity — the noon hour, and the last half-hour.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Loretta Mester Speaks
11:00 AM ET
*John Williams Speaks
3:30 PM ET