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Market Wrap (recording & summary)
Wednesday morning’s drop to 2375.50 had never actually printed intraday during the current rally leg. Last Tuesday’s 2378.50 open had gapped 3 points above it, after closing 5 points under it. So, Wednesday’s low was the lowest print in more than a week. Last Tuesday’s 2378.50 open had since served several times as the range’s low.
Ongoing liquidity challenges had already made any probe of fresh lows likely to recover. In fact, it was recovered ahead of Wednesday afternoon’s FOMC policy statement. Oversold RSIs at the morning’s 2375.50 low make its retest likely. Reaction to the news was a 3-point surge to 2384.00, which the balance of the session only fluctuated around instead of extending, so Wednesday’s low could still be tested Thursday.
Closing Wednesday above 2388.00 would have sealed a bottom. Gapping up above it Thursday would still be credible for extending higher. But anything shallower remains vulnerable to probing fresh lows before the rally to new highs can resume.
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 Jun Contract (EC, ETF: (FXE, UUP))
Another narrowly fluctuating session Wednesday doesn’t change the likelihood of probing fresh highs, although the delay does start to suggest a knee-jerk reaction down may appear first.
Gold Jun Contract (GC, ETF: (GLD))
Tuesday’s flat close had avoided confirming Monday’s breakout, so no lower close was required. Wednesday morning did probe fresh lows anyway, attacking 1245.50. Closing back above 1254.50 would suggest the decline is lapsing, but a recovery still relies on closing above 2359.00
Silver Jul Contract (SI, ETF: (SLV))
Eleven days of the Up/Dow-crash setup finally broke forcibly Wednesday, down. Unless 17.05 were recovered through the next close, 15.95 is in-play.
30-year Treasury Jun Contract (US, ETF: (TLT))
Narrow ranging ahead of Wednesday’s FOMC policy statement hovered just under the 153-12 buy signal.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
RSIs diverged positively on Wednesday’s retest of Tuesday’s fresh low down to 47.30. Closing above 48.10 would now start to suggest another bottoming pattern is trying to form. But the actual reversal signal is still no lower than 49.30 until there is more complexity at the low.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Firming Wednesday back above the original 3.21 sell signal didn’t recover a prior high that might have greeted Thursday’s EIA report from a position of strength. A fresh low close under 3.11 remains outstanding.
Mid-day Update… Rubber band snap?
If probing under yesterday’s lows was the stretch…
This morning’s 2378.00 bias-down target and unfinished business at 2377.25 were probed down to 2375.50. There’s still room down to 2374.00 if not also 2371.50.
They could be tested before the 2:00 FOMC statement. If not greeting the news above this morning’s 2383.50 high, then fresh low are likely in reaction to the news.
Global liquidity issues persist. The pre-FOMC anxiousness will eventually be replaced by pre-post-close earnings anxiousness. In between there is potential for a negative knee-jerk reaction to the news, and its snap back up to fresh session highs, into yesterday’s range.
It’s still possible for a break lower to extend, without recovering. It’s less likely, but the next lower objective would be the 2361.00 area. Rallying without a fresh low is possible, too. But the rubber band stretch might be lacking.
Look ahead: Economic Calendar – for Thu May 4, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: None of the reports scheduled on Thursday’s busy calendar have a reliable track record for influencing price action, although at least Jobless Claims is high-profile. Regardless, the reaction to a pre-open report is often duplicated in reaction to post-open reports.
Challenger Job-Cut Report
7:30 AM ET
International Trade
8:30 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Factory Orders
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Treasury STRIPS
3:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2388.00 | 2384.25 |
| …would target | 2393.00 | 2389.50 |
| Bias-down: under | 2382.00 | 2378.50 |
| …would target | 2376.00 | 2372.75 |
| Signal status: NO-BIAS | 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.