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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))
Trending up Friday had made Monday morning likely to trend up, too. It did. Into Monday afternoon, too. Friday’s rally didn’t emerge from a multi-session range, so it wasn’t a breakout. And Monday was not its confirmation. But the burden of proof is on sellers, as Thursday’s BOE monetary meeting approaches.
Gold Oct Contract (GC, ETF: (GLD))
[Rolling coverage forward to Oct which trades currently at a $3.40 premium to Aug… Dec is currently more active and trades at an additional $3 premium.] Probing higher Friday had rewarded Thursday holding the 1257.00 pullback limit, which is now the sell signal. Sunday night’s weakness didn’t extend down Monday as it ranged narrowly.
Silver Sep Contract (SI, ETF: (SLV))
Thursday’s close had gone out testing its pullback limit but not decisively holding it. Friday’s narrow ranging peaked pessimistically short of filling the gap at Thursday’s opening gap. Monday’s gap up to fresh highs neutralized its attraction ,but only ranged choppily around last week’s highs.
30-year Treasury Sep Contract (US, ETF: (TLT))
Extending higher Sunday night touched the 153-16 inflection point whose recovery would confirm Friday’s close above the 152-26 buy signal. But Monday morning reacted down instead of exploiting the overnight effort, a failure that could prove very bearish for missing the opportunity to bottom. Back under 152-06 would convert that disappointment into a new downleg.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Not reacting down from 48.25 back under 47.25 had made the rally likely to test 50.10, which was attacked Sunday night to within a nickel. Back under 48.25 would now qualify as a sell signal.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Closing above the 2.95 buy signal had yet to extend higher. Friday had formed a Symmetrical Triangle that could break lower falsely before reversing more substantially in the opposite direction. Sunday night’s deep gap down to 2.90 extended to and through the 2.82 prior lows, well beyond the context of being only a false break.
Mid-day Update… The final hour may answer all.
Holding up, but not extending.
This morning’s gap up at the 2473.75 bias-up signal wasn’t extended. Its collapse triggered no-bias, putting into play an offsetting test of the 2465.50 bias-down signal. It was pierced by an errant tick at the morning’s low.
Rallying from there through the noon hour touched this afternoon’s 2471.75 bias-up signal. It held, triggering another no-bias environment. Being the afternoon, an offsetting test of the 2366.25 bias-down signal is not required. But it would be the likely objective of a downdraft.
Meanwhile, the bias-up signal should define the afternoon bias window’s upper-end. Probing it later would be free to resume the overnight rally, and extend to new highs — all but invalidating the Head & Shoulders pattern.
Otherwise, dipping back to the morning’s lows could break lower into the close. The Head & Shoulders pattern would be very much in-play, still awaiting more confirmation at lower levels.
Look ahead: Economic Calendar – for Tue Aug 1, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s econ calendar has plenty of high-profile influential items, well before AAPL’s post-close quarterly earnings. Any noticeable reaction to either pre-open report will likely repeat in reaction to post-open items.
Personal Income and Outlays
8:30 AM ET
Redbook
8:55 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
Gallup US ECI
2:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2474.75 | 2471.75 |
| …would target | 2479.50 | 2477.00 |
| Bias-down: under | 2468.75 | 2466.25 |
| …would target | 2463.00 | 2460.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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.
Post-open Review… Sellers begging to differ.
Gap up is retraced.
Gapping up to the 2473.50 bias-up signal blipped-up to touch the 2475.00 pre-open high. That was done while hovering at the open, maintaining the gap up. Maintaining, but not extending. The opening 15 minutes of volatility lapsed, and so did support, as price collapsed to attack 2467.00.
An offsetting test of the 2465.50 bias-down signal is in-play. It is being attacked now to within 3 ticks, so it won’t become “unfinished business below” if left outstanding. Its test should define the morning window’s lower-end. So, a bullish scenario would not only pierce or overlap it but also try probing under it. This impatient pessimism could be bullish from a contrarian perspective.
We began tracking a Head & Shoulders after Thursday’s close. The overnight / pre-open high held a test of the pattern’s left shoulder. That doesn’t require completing the pattern and launching a downleg, but it makes that bearish resolution more possible. There’s still potential down to the left shoulder’s 2362.75-2363.50 lows without yet confirming the downleg underway. And recovering 2470.25 would help to resume the rally.