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Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2475.00 | 2472.50 |
| …would target | 2481.25 | 2478.75 |
| Bias-down: under | 2466.00 | 2463.50 |
| …would target | 2459.50 | 2457.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP 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)
Wednesday behaved like a session-long rally, trending up through every timing window. But the pattern going into the session didn’t allow for that setup. Why would that matter? A session-long rally would be likely to extend the next morning. Thursday might extend anyway, but isn’t required.
The pattern is also behaving like the resolution to an extended narrowing range. That’s when a false break in one direction reverses more substantially in the opposite direction. This is not that, either, since the range off Friday’s high had not narrowed. Why would that matter? Because the more substantial leg’s duration can be timed against the false break. This one would end Thursday in decline.
A setup that is in effect, actually is no longer in effect — Friday’s requirement for a new trend extreme close is now fulfilled. There is no “unfinished business above.” We’ll see how long that lasts. Wednesday was a breakout from a multi-session range, so a second consecutive higher close Thursday would confirm and require yet another higher close. Or more.
Meanwhile, the ongoing template suggests fresh highs will be short-lived. Closing higher Thursday anyway would go a long way to suggesting this breakout could go a long way. Not confirming Wednesday’s breakout Thursday could open the door to reversing down a long way instead.
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))
Gapping down Wednesday leaves unfinished business above at Tuesday’s close, in addition to the open’s gap up above all prior highs.
Gold Aug Contract (GC, ETF: (GLD))
An overnight mini flash crash was recovered into Wednesday’s open to retest the 1244.00 target that had held its test Tuesday. It held its test Wednesday, too, and back under 1236.00 would now signal the trend reversing back down.
Silver Sep Contract (SI, ETF: (SLV))
Overcoming an overnight dip into Wednesday’s open only retested Tuesday’s highs in the 16.32-16.34 range. Now closing back under 16.02 would signal the trend reversing back down.
30-year Treasury Sep Contract (US, ETF: (TLT))
The recovery wasn’t quick to resume Wednesday, but didn’t have to, as the durable bottom has already formed. Any reaction down — even an intraday probe of prior lows — would be likely to recover and to resume the rally.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s post-close bobble in reaction to API was invisible at Wednesday’s open. Wednesday’s reaction to API was more obvious, surging back to the range’s 47.00 upper-end. Now closing back under 46.00 would signal momentum reversing down, which would be confirmed under 44.90.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Shallow higher highs Wednesday morning tried to outrun the attraction back to 3.01 that could inhibit the recovery.
Mid-day Update… Running on fumes.
Mission now is to hold up through the close.
The morning’s bias environment was entered in reaction down from having tested its 2465.75 bias-up target.
The pullback reaction only attacked its 2462.00 pullback limit where any deeper would have reversed the trend down. Overbought RSIs attracted price back up to fresh highs.
The fresh highs tested this afternoon’s 2467.75 bias-up signal. At 1:20 and still at 1:30. So, this is now a noN-bias environment. Not a bias-up with a required target. And not a no-bias unlikely to probe higher.
noN-bias often behaves like a no-bias, and then like bias-up when the bias environment lapses. That’s if the bias environment is spent hovering around the bias-up signal. Often enough, noN-bias reacts sharply toward the other bias signal.
Back under 2465.50 would start to signal momentum reversing down. There would be potential down to the 2462.00 bias-down signal, but no requirement to hold it. The only requirement outstanding is for a new trend high close — maybe today.
Look ahead: Economic Calendar – for Thu Jul 20, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s busy schedule is also high-profile, and contains reliably influential reports and events. The ECB policy statement is followed by Mario Draghi’s press conference which usually triggers a move or two. Any noticeable reaction to the pre-open Philly Fed survey is likely to repeat in reaction to the post-open LEI.
BOJ policy statement
6:30 PM ET
*ECB policy statement
6:30 AM ET
*Draghi press conference
6:45 AM ET
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
10-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET