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Post-open Review… First twist.
Gap down holds relevant support.
Rallying from the 2783.25 overnight low had reached 2792.50 before opening at this morning’s 2791.50 bias-down signal. It held. Trending up more steeply through the first half-hour reached 2800.00.
Meanwhile, the bias-down signal held its test through 10:15 to trigger no-bias. An offsetting test of the bias-up signal is in-play. An offsetting test of the 2802.00 bias-up target is in-play.
2800.00 has been pierced since 10:15 by only 1 tick, which still qualifies as confirmation. A pullback has room down to 2795.25 before even suggesting another dip is underway, probably targeting 2784.25.
The First Trade & Pre-open Tour Recording… Limber up.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Sunday night’s Globex open had been preceded 20 minutes earlier by a favorable Trump tweet about China trade. Gapping up to 2799.50 extended only momentarily to 2803.50 and ranged narrowly sideways, before retracing the gap to 2794.50. That found actual buyers, and Monday’s open was greeted at 2808.00. Extending higher to 2813.50 at the bias environment high was isolated by noon, reversing the intraday trend. A lot. The balance of the session slid to within 2 ticks of the 2794.50 Globex low. Monday’s opening gap up above all prior highs was left outstanding for retest from below. Also, last Thursday’s bearish Isolation setup was invalidated unless reinstated by proxy at Tuesday’s open.
Overnight action’s new info…
Monday’s close had made a hold-short compelling. Globex didn’t delay extending down to within 3 ticks of what is this morning’s bias-down signal at 2791.50. A bounce soon failed and the decline extended down to 2783.50 well before midnight. Recovering back up into and out of Europe’s opens touched 2791.50. Its reaction down to 2785.00 was fully retraced to retest 2791.50, where another reaction down is developing.
If, then… (notes to accompany the Tour recording)
Sunday’s Trump tweet was only the first taste of the week’s catalysts for price action. Trump is in Vietnam meeting with South Korea’s Un, just as India-Pakistan conflicts escalate. Meanwhile, the Fed Chair’s 2-day semi-annual Congressional testimony begins today, with the embargo on his opening remarks is to be lifted at 9:45 — just as the opening 15 minutes of volatility would normally lapse. Enhanced volatility could both gap down to reinstate last Thursday’s bearish Isolation setup, and also bounce to neutralize the attraction above at yesterday’s open. Regardless of the bigger picture agenda, volatility through tomorrow morning should offer plenty of trade setups… Here’s yesterday’s video example of a live Risk:Reward analysis, which will be added to the Knowledge Base.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2795.50 would be unlikely to trigger the 2791.50 bias-down signal at 10:15. Exiting the open under 2788.00 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2801.50 | 2802.00 |
| …would target | 2808.00 | 2808.50 |
| Bias-down: under | 2791.00 | 2791.50 |
| …would target | 2785.25 | 2785.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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)
Globex gapped up to 2799.50 had extended only momentarily to 2803.50. Its retracement down to to 2794.50 was necessary to find sponsorship capable of trending to fresh highs. Monday’s 2808.00 open was no more eager to extend than was Sunday night’s gap up. It eventually probed higher to test its 2813.50 target, but the bias environment lapsed back under the open’s range. And that put into play a deeper pullback, still.
In fact, the highs reversal extended through the close to within 2 ticks of the 2794.50 Globex low. It already seemed disappointing to have retraced Sunday night’s open, despite having recovered Globex’s gap up and extended it higher both pre-open and post-open. Falling through the close isn’t surprising, but ONLY falling through the close would be.
Extending down overnight is necessary to reinstate the Isolation setup. It had required closing Monday back under 2790.75, but exiting Tuesday’s open under 2788.00 would suggest the interim rally was rejected. Otherwise, a new reversal setup would be needed. Meanwhile, Monday’s open gapped up above all prior highs, and would want to be retested from below to neutralize its attraction above.
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 Mar Contract (EC, ETF: (FXE, UUP))
Still no bullish reason to extend the correction any deeper, but also no need to further delay resuming last week’s confirmed breakout to fresh recovery highs.
Gold Apr Contract (GC, ETF: (GLD))
Narrow flat-to-lower ranging at or around the buy signal left it outstanding, but intact, and still likely to be triggered.
Silver Mar Contract (SI, ETF: (SLV))
Monday morning’s test of the buy signal held and was retraced into the afternoon to end negative, but not reversed down as the buy signal remains intact.
30-year Treasury Mar Contract (US, ETF: (TLT))
Friday’s gap up that had rejected Thursday’s gap down was able only to probe its 146-16 buy signal but not trigger it. Monday’s gap down doesn’t invalidate the buy signal or trigger a sell signal, and it could be only a defensive pullback ahead of Tuesday’s first of the Fed Chair’s two-day Congressional testimony. His opening remarks remain embargoed until 9:45 am ET.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s gap up to prior highs had not closed higher, leaving the pattern vulnerable to a deeper pullback testing 55.85-56.05. Opening there Monday probed lower intraday to attack 55.00, needing to recover 55.10 without delay to resume the rally.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Closing above the 2.70 buy signal Friday extended higher immediately by gapping up Sunday and Monday. Extending higher intraday to 2.82 barely qualifies as a confirmed breakout, with room for a healthy pullback down to 2.74.