S&P
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))
Gapping up Wednesday extended through the 1.1100 target, which must now hold as support to maintain the upside momentum.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s gap up extended through the 1304.00 target for a second consecutive higher close confirming Tuesday’s breakout. At least an eventual third higher close is now required.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s gap up trended higher intraday, and produced a second consecutive higher close confirming Tuesday’s breakout. At least an eventual third higher close is now required..
30-year Treasury Dec Contract (US, ETF: (TLT))
Rallying overnight to gap up Wednesday morning above the 163-02 bounce limit was retraced almost immediately to fill the gap back down to Tuesday’s close. Another rally intraday attacked the overnight highs, and “higher prior lows” at 163-27. All of which developed prior to the afternoon’s FOMC policy statement.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Breaking sharply lower again Wednesday probed under the 45.70 target. Already extending down to the ultimate 43.25 target is difficult after trending so far so recently. But it is likely so long as 45.70 holds as resistance.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Tuesday’s fresh low had fulfilled the decline’s structural objective, to its 2.87 calculable objective, and price reacted up from there intraday. None of which prevented Wednesday’s gap down under prior lows. Thursday’s EIA report is not being greeted from a position of strength, other than for the potential of forming an Island reversal pattern.
Mid-day Update… Stuck in the muddle.
Post-open reversal down hasn’t recovered, with FOMC looming.
This morning’s 2100.50 bias-down signal held its test to signal no-bias, putting into play an offsetting test of the 2109.50 bias-up signal. Attacking it to 2106.50 does not satisfy it.
It could have been rejected by breaking under 2100.50 by 10:30, but it was still being overlapped. Probed, but overlapped. Exiting the bias environment at 11:30 under the 2094.75 bias-down target could have invalidated it, too. But despite the bias environment developing under the opening range, it didn’t trend down to the bias-down target, let alone break it.
A test of this morning’s 2109.50 bias-up signal has become “unfinished business above” that requires eventual test.
Meanwhile, an opportunity to isolate the bias environment’s dip was not exploited. Exiting the noon hour and entering the afternoon’s bias environment above a prior high like 2102.50 may yet trap shorts. Otherwise, fresh lows at 2093.50 are likely, and a retest of yesterday’s 2091.00 low would likely break lower to 2082.00 or deeper.
The FOMC policy statement is a wild card. A negative reaction is likely since pessimism hasn’t been fulfilled or rejected — price simply remains depressed. The statement isn’t likely to raise rates, but it is likely to speak in hawkish tones. There’s reason for a knee-jerk reaction down, and little reason not to recover it.
Look ahead: Economic Calendar – for Thu Nov 3, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: None of Thursday’s reports actually has a reliable track record for influencing price action. But there are a lot of reports, so any reaction to one pre-open is likely to be duplicated by others.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
PMI Services Index
9:45 AM ET
Factory Orders
10:00 AM ET
ISM Non-Mfg Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2109.75 | 2103.75 |
| …would target | 2115.50 | 2109.50 |
| Bias-down: under | 2199.50 | 2093.50 |
| …would target | 2094.00 | 2088.00 |
| Signal status: BIAS-DOWN | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Half-step forward, three-quarters step back.
Opening dip recovered in time, attacked too late.
The open’s dip to 2099.50 was also a test of the 2100.50 bias-down signal. Its reaction probed above overnight highs to 2106.50. Triggering no-bias after holding the bias-down signal’s test through 10:15 put into play an offsetting test of the 2109.50 bias-up signal.
A pullback into 10:30’s EIA announcement became a plunge as the announcement triggered Crude Oil dropping further. The 10:30 bar probed under the bias-down signal, and under the opening low. But it also overlapped the bias-down signal, and didn’t qualify for invalidating no-bias.
So, an offsetting test of the bias-up signal remains the likely resolution after the current dip is done. And it could be done after testing only 2093.50, not necessarily testing yesterday’s 2091.00 low required by its oversold RSIs.
Back above 2101.25 would signal the late plunge had ended already. A very aggressive move to fresh highs would be likely. Otherwise, a fresh low under 2097.00 would target 2093.50 and potentially also probe under 2091.00.