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The First Trade & Pre-open Tour Recording… Calm before another storm.
Proper context can start the day with a solid win and make all the difference.
NEW 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…
Wednesday’s open was greeted unchanged from Tuesday’s 2385.00 close after ranging narrowly overnight. Neither of which prevented a morning rally to fresh highs attacking 2395.00. Maintaining the rally or extending it was prevented by the rally itself, having originated from unchanged after not gaining traction the prior afternoon. It was doomed to failure, which finally proved out during the last half-hour’s slide to fresh session lows at 2382.00. Bias-up targets were met, and only the morning’s overbought RSIs were left outstanding by a 1-tick miss.
Overnight action’s new info…
Immediately extending Wednesday’s late slide several ticks to 2381.25 ended the leg. Or paused it. Overnight action has duplicated the prior night’s narrow ranging, back up to 2385.00, and back down to 2381.25. Now a surge is testing 2386.50 as ECB’s policy statement takes the stage.
If, then…
Today may yet extend yesterday’s reversal further down. By two consecutive closes above 2375.00 putting into play new highs, the rally can rest on its laurels. Briefly, so a productive pullback will be steep. A bounce has room up to 2388.00 before suggesting the rally is already resuming. Mario Draghi’s press conference following the ECB’s policy statement is a reliable catalyst for expanding volatility. The pre-open Durable Goods report is influential to price action, too, and quarterly earnings remain in full-swing.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2378.00 would be likely to trigger the 2380.25 bias-down signal at 10:15. Exiting the open above 2385.00 would be unlikely to trigger bias-down. Exiting the open above 2386.50 would be likely at least to probe the 2388.00 bias-up signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2391.25 | 2388.00 |
| …would target | 2396.75 | 2393.50 |
| Bias-down: under | 2383.50 | 2380.25 |
| …would target | 2378.25 | 2375.00 |
| 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)
Wednesday’s open was greeted unchanged from Tuesday’s 2385.00 close. Trending narrowly avoided triggering the 2388.00 bias-up signal. But the bias environment firmed above it anyway. And then surged to test the 2394.00 bias-up target. It was all retraced by a knee-jerk reaction to news. Until the afternoon bias-up signal triggered, and its target was met to within 3 ticks. That also reacted down on another headline.
Headlines trigger weak-handed sponsorship. Whether coinciding with resistance, or leveraging a fulfilled target, the reaction is artificial. By preventing an organic reversal, its reversal is only temporary. Which probably delayed truly punishing the morning’s doomed rally. Breaking lower through the position-squaring window finally probed under the morning’s lows, and into negative territory.
Thursday may yet extend the reversal down. Two consecutive closes above 2375.00 have put into play new highs, so the rally can rest on its laurels. Briefly. There is no shortage of catalysts — Thursday’s econ calendar is busy and high-profile, albeit not very influential after the pre-open Durable Goods. The quarterly earnings tap is still flowing.
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))
Gapping down Wednesday to Tuesday’s 1.0920 open prevented forming an Island. Dipping into Monday’s range was recovered back up toward Tuesday’s above 1.0960.
Gold Jun Contract (GC, ETF: (GLD))
Remaining under pressure through Wednesday remained in proximity to the pullback’s 1261.00 area target. That was tested in reaction to tax reform headlines, which reacted up back above 1266.00.
Silver May Contract (SI, ETF: (SLV))
Trending down throughout Wednesday to a fresh pullback low then blipped-down on tax reform headlines, before firming.
30-year Treasury Jun Contract (US, ETF: (TLT))
Choppy ranging Wednesday didn’t didn’t reverse momentum up, suggesting the 151-22 pullback objective remains in-play so long as 153-12 isn’t recovered.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s reaction to EIA surged to a fresh recovery high at 50.20, which was consolidated into the close.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Wednesday just under the 3.21 “higher prior lows” sell signal extended higher to 3.28. At least an eventual third lower close remains outstanding, so the one-day reversal isn’t greeting Thursday’s EIA report from a position of strength.
Look ahead: Economic Calendar – for Thu Apr 27, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The calendar gets busy again on Thursday. Yet, other than the ECB statement and Draghi’s press conference, only the pre-open Durable Goods report has any reliable track record for influencing price action. The post-open housing sector report may trigger a reaction, but only to the extent that it disagrees with Tuesday’s three reports.
*ECB Policy statement
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
International Trade in Goods
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Farm Prices
3:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET