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Saturday Review Link
A new trend high close. On a Friday. Those conditions have implications. General implications, which can be fine-tuned by other observations — such as Friday’s close being AT the range for noise around the highest “unfinished business above.” So, be sure to join us by 9:30am ET for this weekend’s Saturday Review. After discussing the bigger picture and gaming out strategies for playing next week’s likelier opening setups, we’ll do instant analysis of any stock charts that you request… See you there!
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2461.50 | 2459.00 |
| …would target | 2467.00 | 2464.75 |
| Bias-down: under | 2455.75 | 2453.50 |
| …would target | 2451.50 | 2449.00 |
| 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)
It’s not often that a trend has no “unfinished business” outstanding. That was the case Friday afternoon, which met the morning’s 2452.25 bias-up target, the nearly 4-week old 2454.00 bias-up target, and Friday afternoon’s 2456.50 bias-up target to within 3 ticks.
Not often, but not rare.
Rare is that only one setup was available to create new unfinished business above. That would be a new trend high close. And that condition would create new unfinished business only because it was a Friday. New trend high closes during the week don’t have the same relevance.
Other attractions that Friday’s rally neutralized include any prior high that was probed intraday. Which is a risk. Closing above a prior high can be a breakout or be of little significance. But probing a prior high without closing above it can be significant resistance. The rally risked ending with every new high it probed. But it succeeded.
Its last half-hour reaction down from 2461.25 to 2455.00 let sellers do the same thing with support as buyers did with resistance. The afternoon rally’s last relative low was pierced by the session’s final bar. While that was too late for its break to be relevant, it’s still a failed attempt. Still, closing at the 2456.50 room for noise above the nearly 4-week old “unfinished business” does suggest that buyers need a rest… if only to hunker down as quarterly earnings start.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Check your email for the Saturday Review link tomorrow morning, which begins at 9:30 ET.
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))
Having held the 1.1450 pullback limit Thursday, Friday morning’s econ reports easily triggered a surge attacking 1.1510-1.1525 resistance. Holding its test enables closing under 1.1450 to signal the trend reversing down.
Gold Aug Contract (GC, ETF: (GLD))
Gapping up Friday back above the 1219.00 sell signal avoided confirming Thursday’s shallow close under it. Back under 1222.00 would now signal new lows. Otherwise, this bounce can extend to 1236.00 or 1243.00.
Silver Sep Contract (SI, ETF: (SLV))
Thursday’s dip was extended overnight to test the 15.55-15.60 pullback limit before rallying into Friday’s close, and gapping up to recent highs at 16.00. Holding above 15.75 now allows extending higher to 16.30 or 16.70.
30-year Treasury Sep Contract (US, ETF: (TLT))
Initially surging in reaction to Friday’s econ reports formed a gap up to 152-12 that surged through Thursday’s highs up to 153-16. Its reaction retraced back down to the 152-12 opening print. “Another warning shot across the bow” at sellers? No further backing-and-filling is needed before resuming the recovery.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s open and Thursday’s close were both at 46.00, preventing it from signaling a rally underway. That didn’t prevent fresh highs Friday morning from testing 46.75. Closing back under 46.00 would be the first step to allowing a more durable bottom to form, but this continues regardless to be a bottoming pattern.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Dipping overnight to 2.92 essentially retested the gap back down to Monday’s close, Friday’s open was at Thursday’s low, and firmed from there. No further backing-and-filling is required to form a bottom, so any early strength Monday would be credible for extending higher intraday.
Mid-day Update…
Near-term and longstanding targets met.
This morning’s bias-up signal triggered, putting into play its 2452.25 bias-up target. Consolidating up to 2450.00 into the noon hour finally broke higher to meet it.
This morning’s target? That’s nothing. The MONTH-OLD “unfinished business above” at 2454.00 was met, too. And the delay in meeting 2454.00 suggested also testing its room for noise above it at 2456.50. Which is also this afternoon’s bias-up target, and was just met to within 3 ticks.
There is no “unfinished business above.” Only one condition can create any new unfinished business above — closing above prior highs, today, because today is a Friday. Otherwise, having neutralized its target, exiting the bias environment at 2:30 under 2451.50 would be vulnerable to collapsing into the weekend.