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Post-open Review… And higher.
Overnight rally extends intraday.
The overnight rally peaked upon testing the gap back up to last Wednesday’s 2730.00-2731.00 close. This doesn’t qualify as filling the gap, which must be done intraday. But a pullback down to 2726.00 surged at the open, to and through overnight highs up to 2733.00. Gradually eking even higher has touched 2735.50.
2735.50 isn’t an impressive calculable target. As resistance, 1-minute RSI diverged negatively and 3-minute RSI eventually left persistently overbought territory. Price has reacted down to 2732.00. All of which seems to be noise, since 2735.50 satisfies very little buying pressure.
2735.50 also stops pessimistically short of touching last week’s 2737.00-2737.75 highs. That’s potentially bullish from a contrarian perspective. Reacting down under 2732.00 could test 2730.00 and still be likely to resume the rally. Unless something more dramatic were to develop below, the rally could extend to 2743.50 or 2751.00.
The First Trade & Pre-open Tour Recording… Overnight buyers, again.
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…
Monday’s gap up to 2714.50 was well off of Sunday night’s 2721.50 high, but still well above the 2700.50 overnight low. Dipping through the opening 15 minutes of volatility settled into a choppy range largely contained between 2705.50-2712.75, and ranging around 2708.00-2709.00, which ultimately contained the close.
Overnight action’s new info…
Already firming soon after the Globex open, news of a budget deal seemed to be drive price sharply higher. Sunday night’s highs were probed by 3 points up to 2724.25 before midnight. Ranging flat-to-lower found support at what is this morning’s 2720.50 bias-up target. The consolidation finally resolved by surging into Europe’s opens, attacking 2727.00. Another correction has recovered to now probe fresh highs probing 2728.00.
If, then… (notes to accompany the Tour recording)
Overnight patterns don’t necessarily guide intraday activity. One example is Sunday night’s highs, which had stopped pessimistically short of touching the consolidation from last Tue-Wed, and its “higher prior lows” at 2723.00-2727.00. Contrarianism would have made that bullish, if the attack had developed intraday. Another example is Monday night’s actual test of those same higher prior lows. Their test intraday would be likely to react down, but gapping up above resistance often extends through it intraday. The question is how today’s opening 15 minutes of volatility negotiates the higher prior lows — and possibly also the gap back to Wednesday’s 2730.00-2731.00 close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2722.75 would be likely also to exceed the 2720.50 bias-up target at 10:15 to renew the bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2716.00 | 2715.00 |
| …would target | 2721.50 | 2720.50 |
| Bias-down: under | 2704.00 | 2703.00 |
| …would target | 2698.50 | 2697.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| 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)
Sunday night’s 21-point range wasn’t extremely wide, but volatility made the most of its range. The open’s blip-up to 2712.75 had reversed down 12 points to 2700.50. And Europe’s opens had launched a 17-point surge up to 2721.50. Ranging choppily into Monday’s 2714.50 open was retraced back under 2712.00 resistance during the opening 15 minutes of volatility. The morning and afternoon held tests of 2705.50 as support.
That 2705.50-2712.00 range defined the room for noise around 2708.00-2709.00, which also defined the balance of the session. Breaking higher in time could have formed a compelling hold-long setup, which was attempted, in time, but not maintained through the close. The pattern remains vulnerable to resolve in either direction.
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 finding any traction below, Sunday night extended the decline to fill the gap back down to 1.1335 and then to fresh lows at 1.1300. No abrupt recovery attempt would be credible at this stage, so no buy signal is being considered.
Gold Feb Contract (GC, ETF: (GLD))
Sunday night’s reaction back down to Thursday’s 1310.00 pullback low didn’t reject Friday’s attempt to trigger the 1317.00 buy signal, which would be credible for extending higher intraday if attempted Tuesday.
Silver Mar Contract (SI, ETF: (SLV))
Already retracing Friday’s recovery attempt, Sunday night’s dip retested Thursday’s 15.65 prior lows, where closing back above 15.80 would still be credible for extending higher.
30-year Treasury Mar Contract (US, ETF: (TLT))
Having fulfilled the rally’s target to retest the 147.-00 prior highs, Sunday night’s weakness extended into a deeper pullback Monday that ranged between 146-10/146-16 to avoid reversing the trend down, while keeping alive potential for reinstating the rally’s upside momentum.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday was greeted by overnight weakness still testing the 52.00 sell signal, but not yet breaking lower, and keeping alive potential for recovering 53.30 to launch another rally effort.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Avoiding a fresh low on Friday had recused Monday from any requirement to probe lower. It also enabled Sunday night’s open to gap up and touch “higher prior lows” at 2.75 that can begin forming a bottom. Closing any higher Tuesday could extend, but preferably after filling the gap back to Friday’s close under 2.60.