S&P
Pre-market Tour (recording & summary)
The overnight bounce into positive territory up to 2130.50 had been retraced to almost 2124.00. Reacting up to 2129.00 has corrected that dip, while narrowing the range around 2126.75 — which is essentially the 61.8% retracement of Friday afternoon’s plunge. Recovering it through the open, or not, would suggest whether the next downleg had begun.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Not rejecting.
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…
Friday’s session had recovered from probing fresh lows overnight down to 2116.00. Potential to 2137.50 was attacked to within 5 ticks when the FBI headline triggered a 23-point plunge to fresh lows at 2112.50. Bouncing choppily into the last half-hour attacked 2128.00, retracing 61.8% of the plunge. No “unfinished business” was left outstanding but it was the fourth consecutive lower close and lower intraday lows.
Overnight action’s new info…
Sunday night’s open blipped-down to 2114.75 and bounced quickly into a 2119.00-2122.00 range. An eventual breakout rallied up to 2130.50, 7-8 points back into positive territory. Its retracement has been attacking 2124.00.
If, then…
The origin of Friday afternoon’s plunge was a little premature. But not by much and not at all unexpected — the overnight low’s retracement was likely. The plunge’s 61.8% retracement also tested “higher prior lows” before the close, fulfilling a correction. Bouncing overnight doesn’t preclude launching a new downleg, not this shallow of a bounce, not without also gapping up above Friday afternoon’s highs (currently 11 points higher). Four consecutive lower closes all but require at least an intraday fresh low before any recovery would be credible.
First Trade…
[Click here to view the Bias parameters] Exiting the open under 2127.75 at 9:45 would be unlikely to trigger the 2131.00 bias-up signal at 10:15. Exiting the open above 2121.25 would be unlikely to trigger the 2117.50 bias-down signal. Exiting the open under 2116.75 would be likely to trigger bias-down.
Sunday night’s Globex… The world’s turn.
Only US markets were available for reaction to Friday’s FBI announcement. Soon, the rest of the world will have an opportunity to react — not only to the news, but also to the US markets reaction, which was very pessimistic. World markets will react before US markets to the weekend’s clarification of Friday’s news, which has been little, and to its spin, which has been much. Oh, and BOE’s Carney was rumored to be resigning, and now not, but that’s not very interesting. Charts will be available when Globex opens at 6:00pm ET.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2136.75 | 2131.00 |
| …would target | 2143.00 | 2137.50 |
| Bias-down: under | 2123.00 | 2117.50 |
| …would target | 2116.75 | 2111.00 |
| 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.
Post-market Wrap (recording & summary)
Friday put the “FBI” in Fibonacci…
Bad news for Hillary Clinton triggered a 23-point afternoon plunge. Its origin was a little premature, enough so that its recovery could have trapped shorts for being weak-handed, and formed a durable bottom. Trending down relentlessly into the close would have been another form of weak-haned sponsorship, but that was avoided, too.
Instead, the plunge was retraced by 61.8% which also tested Wednesday and Thursday’s “higher prior lows.” Both are natural corrective limits prior to resuming the breakout, and producing new lows. Being the fourth consecutive lower close makes lower lows likelier than a recovery, and dooms to failure an immediate recovery attempt.
Details and other markets coverage are discussed in the post-market Wrap recording here.
We’ll review the bigger picture and any stock chart analysis requests during this weekend’s Saturday Review, which begins at 9:30am ET. We skipped last week and will skip next week, so be sure to join us. Its link will be sent to you overnight.