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 Sep Contract (EC, ETF: (FXE, UUP))
Gapping down Monday to close under support qualifies as a breakout, not confirmation of Friday’s intraday reversal that had also contained a fresh relative high. A second consecutive lower close Tuesday would confirm a new downleg underway, likely targeting fresh lows.
Gold Aug Contract (GC, ETF: (GLD))
Recovering from a fresh low testing 1317.00 before Monday’s open didn’t change that Wednesday’s confirmed breakout requires at least an eventual third lower close. The leg itself is likely targeting 1296.00-1297.00.
Silver Sep Contract (SI, ETF: (SLV))
Wednesday’s confirmed breakout requires at least an eventual third lower close, helping to absorb Monday’s initial strength and keep alive the decline’s momentum. Its 17.35 target was attacked to within 2 cents overnight before bouncing through Monday morning, which may have robbed the decline of near-term momentum.
30-year Treasury Sep Contract (US, ETF: (TLT))
Friday’s close under the prior week’s lows was followed by gapping up Monday back above the prior week’s lows. Extending higher through the noon hour probed above 171-22, and closing above it could invalidate the break. But 172-15 must be recovered through the close to avoid fresh lows under 169-30.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Monday helps to confirm 48.35 resistance held its test on Friday. But closing under 46.60 is still needed to signal momentum extending down.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Gapping down Monday comes from a position of strength, after Friday’s unnecessary higher close. Gapping down, even slightly, creates new “unfinished business above” back up to Friday’s close, which can at least impede attempts to reverse down. But closing under 2.84 would likely test 2.78, whose break would trigger a deeper detour down.
Mid-day Update… There’s a fork in this road. Take it.
SPECIAL NOTE: MARKET WRAP WILL BEGIN ONE HOUR EARLY AT 3:03 PM ET.
This morning’s noN-bias environment was almost followed this afternoon by another. But the 2182.00 bias-up signal was not probed in time to trigger, touched in time to invoke the grace period, or exceeded in time to invalidate its signal.
This is a no-bias environment, and 2182.00 should define the range’s upper-end. Until the bias environment begins lapsing at 2:30, or at least comes within view.
Probing above 2182.00 prematurely would be “no-bias trending” that is doomed to failure. Probing higher after 2:15 would be free to extend higher, aggressively, targeting 2187.00-2188.00.
Back under 2179.75 would start to signal the rally potential had failed. A higher sell signal would become calculable after probing fresh highs. Regardless, triggering a sell signal could easily target 2171.50, but not so easily target fresh post open lows.
Look ahead: Economic Calendar – for Tue Aug 30, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Consumer Confidence is Tuesday’s only influential report and it happens also to be high-profile. Any reaction to its pre-open release is likely to be duplicated in reaction to post-open reports
Redbook
8:55 AM ET
S&P Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
Eric Rosengren Speaks
3:15 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2183.75 | 2182.00 |
| …would target | 2188.50 | 2187.00 |
| Bias-down: under | 2175.75 | 2174.25 |
| …would target | 2169.75 | 2168.00 |
| Signal status: NO-BIAS | 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… Good to the last pop.
Bias-up signal held, held on to.
Deceptively calm overnight narrow ranging spiked up from the 2169.75 open. Just recovering 2170.75-2171.50 through the opening 15 minutes of volatility had made the 2177.75 bias-up signal’s test likely. Surging through the opening 15 minutes of volatility had already come within 3 ticks of 2177.75.
Testing and retesting 2177.75 didn’t break it. But neither was it rejected, still being overlapped when the grace period lapsed at 10:30. Holding its test would have put into play an offsetting test of the 2163.50 bias-down signal, and triggering bias-up would have targeted 2183.00.
The pullback limit is being violated, and back under 2175.00 would target 2166.00. There is otherwise no bias requirement this morning.