S&P
Post-market Wrap (recording & summary)
The gargantuan character of Monday’s rally was attributed as much to its catalyst as to its timing, The FBI weighed in favorably on Clinton, after a relentless two-week decline from 2150.00 had fulfilled its 2082.00 target. That perfect storm may be responsible for fulfilling a session-long rally, despite the setup’s intervening weekend which often renders the setup unreliable.
But intraday timing windows complied with the session-long rally template by there being only one exception to each probing its prior timing window’s high. Essentially, that was the final 60-90 minutes which pulled back.
Surging to fresh session highs into the close at 2130.00 was isolated to after the position-squaring window had begun lapsing. Dismissing that would allow the session to comply fully with the session-long rally template. Continuing to comply would suggest Tuesday morning will probe higher, possibly trending, next attracted to 2134.00 and 2138.00.
A pullback could test Monday’s mid-day “lower prior highs” down to 2123.50 without even hinting of reversing the trend. Dipping deeper to 2118.25 would start to threaten, but still have room down to 2113.50.
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… We found the exception.
Final window is dipping.
Each timing window of a session-long rally tends to probe its prior timing window’s high. There’s usually one exception. The likeliest candidate was the noon hour, but that wasn’t it. It seems to be the second likeliest candidate, which is the final 60-90 minutes..
The noon hour and bias environment each probed their prior timing window by a single tick, attacking 2125.00. That’s a single tick more than the final 60-90 minutes, which has slid to 2119.50.
A pullback’s objective is at least 2118.25, if not also 2113.50. Testing either would still not reverse the trend back down. And if the session-long influence remains intact — its influence today possibly being more coincidental — then tomorrow morning should recover to probe above today’s highs.
Fresh highs would next target 2134.00 and possibly 2138.00. Simply sliding into another downleg is possible, albeit unlikely after today’s rally.
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))
Ranging around the 1.1100 target had never broken higher, but an Ascending Triangle had formed through Friday, thanks to its inside day. Nevertheless, gapping down under the range’s low Monday and extending down intraday signals a reversal targeting 1.1000 and potentially also 1.0965. It’s likely only a temporary corrective leg since it had originated from a failed Ascending Triangle.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down Monday extended to actually test the 1284.00 pullback limit that was narrowly avoided at Thursday’s open. Regardless, Friday was the opportunity to reject Thursday’s intraday recovery, so Monday’s dip should prove to be only a retest of the pullback low. Otherwise, confirming the break would target at leas 1266.00 and probably 1252.50.
Silver Dec Contract (SI, ETF: (SLV))
Gapping back down Sunday night extended lower Monday morning to attack or test the 18.05 pullback limit which had held Thursday’s gap down. It’s probably too late to confirm the original break since it wasn’t rejected immediately Friday.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping down Monday back under the 163-02 bounce limit has no more traction than the probes above it — until closing under 162-16. Regardless, extending down would be in-line with expectations to better form a bottom by probing under it again, probably to 160-10.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already having bounced early Friday from the decline’s 43.75 target, opening firmer or gapping up Monday was free to extend higher. So, the session’s restrained optimism does suggest that actually rallying could be very productive, regardless of its vulnerability to the decline eventually extending.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Gapping up slightly Monday was not the rejection of Wednesday’s gap down that would launch a credible recovery. Closing above 2.88 and 2.91 remain the minimum requirement to being signaling the decline has ended and that momentum may be reversing up.
Mid-day Update… Session-long, after all?
Relentlessly higher highs following the setup’s template.
Having trended down into the prior session’s close, gapping up above its afternoon bias environment high can form a “session-long setup.” All but one intraday timing window would then probe its prior timing window’s high.
That exception tends to be the noon hour, or else the last 60-90 minutes.
Occasionally, the exception is the morning’s bias environment. But not today, after it extended the post-open 6-point surge from 2108.00 another 7-9 points to 2121.00 and 2123.00. And it’s not the noon hour, which immediately probed a fresh high.
All of which assumes this is a session-long rally. It may be, but developing with an interim weekend is not reliable. Nevertheless, we’ll still tack the timing window template.
Price action since the noon hour’s initial surge has ranged flat to lower, only slightly lower, testing 2122.00. A deeper pullback could end at 2118.25 or fall to 2113.50, and still not signal the trend reversing down. Probing a fresh high during this current bias environment would enable raising the sell signal, but not the potential attraction’s below.
Complying entirely with the template for a session-long rally wouldn’t make its other features any more reliable. But I should note that when the setup’s timing windows do extend correctly, the following morning tends to probe higher, too.
Look ahead: Economic Calendar – for Tue Nov 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Voting results won’t be available until nighttime, but independent exit polls could leak their way into price action. There is no other distraction from Tuesday’s calendar, which contains a couple of influential items. JOLTS is an opportunity to confirm or invalidate Friday’s Employment Situation report — fine-tuning it isn’t likely to be influential. The noon hour’s Fed speaker may have impact, too.
NFIB Small Business Optimism Index
6:00 AM ET
Charles Evans Speaks
7:45 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
*Charles Evans Speaks
12:20 PM ET
3-Yr Note Auction
1:00 PM ET