S&P
The First Trade… More optimism.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Wednesday’s open gapped down at or under Tuesday morning’s 2119.00 low, and quickly rallied 22 points to attack Tuesday’s high up to 2141.50. Oh, and Tuesday’s low was probed by 91 points overnight. So, not only was the crash isolated to the overnight, but the intraday exploited it, so sellers were all but marginalized for the day. Bias-down signal and target held the morning’s correction that attacked 2125.25, and the balance of the session rallied to fresh highs at 2166.50. The rally gained traction by entering the final hour above the bias environment’s high and then trending up through the 3:10-3:2- timing window. That didn’t prevent a late corrective dip down to 2156.00.
Overnight action’s new info…
Wednesday’s late pullback consolidated relatively narrowly around 2160.00 until midnight. Suddenly surging to fresh highs peaked within 1 tick of this morning’s 2171.00 bias-up target. The rally extended out of Europe’s opens and tested the next higher objective’s 2180.00 area by 2 ticks. Its reaction back down to 2171.00 was retraced by 8 points, but now another reaction down is testing 2171.00.
If, then…
Wednesday afternoon’s traction makes Thursday morning likely to trend higher, often regardless of its opening print. We’ll want that confirmed by there being almost no delay in rallying post-open Thursday, since the next higher target in the 2180.00 area is already fulfilled overnight. The next higher objective would be fresh highs probing 2-3 points above 2184.25. Otherwise, inverting the morning’s bullish influence into a pullback would target the 2167.00 area. Both legs are possible today, in either order — so today’s session would be more bullish if the morning corrects down before resuming the rally, and more bearish if fresh highs were to print first.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2174.00 would be likely also to recover the 2171.00 bias-up target at 10:15 to renew the bias-up signal, which would essentially next target 2180.00. Exiting the open above 2168.00 would be likely to trigger the 2164.25 bias-up signal at 10:15. Exiting the open under 2161.00 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2168.25 | 2164.25 |
| …would target | 2175.00 | 2171.00 |
| Bias-down: under | 2158.25 | 2154.25 |
| …would target | 2152.75 | 2148.75 |
| 7Signal status: LATE NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS | 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.
Post-market Wrap (recording & summary)
Today’s post-market Wrap recording identifies most of the new influences that arose during election night and in its aftermath.
Attractions below:
The retest of last Friday’s 2080.00-2094.00 range that was required by the Comey rally’s gap up. Its retest is required intraday, so the overnight drop did not fulfill it. The “new Globex trend extreme” that developed under prior lows, which requires being retested eventually intraday. The low’s limit-down, which also is historically retested.
Buying pressure:
The low’s 61.8% retracement of the Brexit reaction’s plunge, which serves by proxy as its retest. Isolating the probe under Tuesday’s lows to the overnight so that sellers might be marginalized for the day. The successful setup often extends for multiple sessions, retracing multiple downlegs.
Upside attractions:
Wednesday morning’s break above downtrending resistance that had been guiding the two-week slide. Its ~2167.00 “connector” was tested at the intraday high, and any higher would target fresh highs probing its 2184.25 anchor. Meanwhile, intraday patterns already in-play are next targeting the 2180.00 area.
Near-term momentum:
Buyers gained traction by entering the final hour above the bias environment’s high and then trending up through the 3:10-3:2- timing window. This makes Thursday morning likely to trend higher, regardless of gapping up. Wednesday’s mid-day Ascending Triangle already broke higher and a dip corrected the break higher. So, whatever the opening print, there should be no delay in rallying.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Yuge.
Still probing fresh session highs.
The next higher objective of 2160.00 was tested minutes before noon. Its reaction down to 2146.25 formed an Ascending Triangle that contained two timing windows of price action.
This afternoon’s no-bias environment resolved up when the bias environment began lapsing. That was still overlapping the noon hour’s 2156.25 high. But the final hour was entered above the bias environment’s 2159.00 high. And the 3:10-3:20 timing window trended up to fresh session highs.
That’s traction, in a setup which tends to play-out the same day. Back under 2161.75 would start to signal a corrective dip underway instead. Otherwise, the balance of the session should essentially trend up. The next higher objective is essentially 2180.00.
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 Dec Contract (EC, ETF: (FXE, UUP))
Fluctuation between closes can’t be prevented, but it doesn’t necessarily affect the objective in-play. Tuesday night’s surge up to 1.1315 didn’t prevent opening flat-to-lower Wednesday and extending to the 1.1010 target. Potential to 1.0965 was fulfilled soon afterward by fresh lows testing 1.0940. Back above 1.0995 would signal the decline’s momentum was ending.
Gold Dec Contract (GC, ETF: (GLD))
Attacking the pullback’s 1266.00 target to within $2 overnight was recovered to sharply higher highs overnight testing 1338.00. Its reaction down Wednesday morning probed under the 1291.50 buy signal down to 1270.00. Now recovering 1284.00 would signal another rally leg, and prevent extending down to 1252.50.
Silver Dec Contract (SI, ETF: (SLV))
Surging overnight to test 19.00 was retraced entirely Wednesday morning to fill the gap back to Tuesday’s 18.30 close. An intraday retest of the overnight highs is likely before a durable decline would be credible.
30-year Treasury Dec Contract (US, ETF: (TLT))
Surging overnight to attack 165-02 was reversed down sharply, back under the 162-16 sell signal and through its minimum 160-10 objective to test 159-16. The decline extended intraday down to 158-22, next targeting 155-30 while bounces are likely to hold 158-04.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already retesting the decline’s 43.75 target overnight and recovering to open Wednesday flat-to-higher has created potential for avoiding a new downleg. Closing above 44-30 helps to seal a bottom. Already testing 45.70 now requires breaking it to launch a rally to and through 48.25.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Wednesday’s open was essentially flat with the close of Tuesday’s gap down session. Extending down to 2.56 was recovered to the week’s “higher prior lows” at 2.74. The prior week’s higher prior lows above at 2.86 must be recovered to seal a bottom. Meanwhile, Thursdays open is not being greeted from a position of strength, although a bottom pattern does not require fresh lows..