S&P
Pre-market Tour (recording & summary)
The 2187.00 area has held the overnight recovery. Reacting down to 2185.00 must hold to isolate the overnight drop,and to resume the recovery. Otherwise, retesting the 2180.75 overnight low would be likely, and becoming a new downleg would be possible.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Filling the gap.
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…
Tuesday’s gap up almost immediately neutralized any “unfinished business above,” essentially from last Monday. The gap back up to last Monday’s 2187.00 close was filled at Tuesday’s open, and last Monday’s 2190.75 high ‘s high was pierced several minutes later. The balance of the session drifted back down, closing at a fresh session low, which was also last Monday’s 2185.00 opening print.
Overnight action’s new info…
Tuesday’s intraday slide eventually resumed, extending to fresh lows at 2180.75 into Europe’s opens. That essentially fills the gap back down to Monday’s close, testing Friday-Monday’s 2182.00-2184.25 “lower prior highs” as support. Price action since then has rallied to attack 2188.00.
If, then…
Tuesday’s session was a breakout above a three-session range. Essentially being contained within last Monday’s range undermines the breakout. Closing today above yesterday’s high might otherwise confirm the breakout, but that would be undermined, too. The rally would still get a benefit of the doubt, having recovered from the overnight dip back down to lower prior highs — more so, if the overnight dip were isolated by not revisiting any part of it post-open. There is otherwise no unfinished business above to prevent launching a credible new downleg at any time.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2184.25 would be unlikely to trigger the 2182.75 bias-down signal at 10:15. Exiting the open under 2180.50 would be likely to trigger bias-down. Exiting the open above 2190.00 would be likely to trigger bias-up.
Post-market Wrap (recording & summary)
There is no unfinished business above. Last Monday’s high was barely pierced, but simply touching it would have fulfilled its required retest. Drifting lower from there throughout the day doesn’t suggest the uptrend’s momentum has lapsed, or that new counter-trend sponsorship has arrived.
But reacting down instead of trend higher was more relevant for what it prevented. Not trending above last week’s high avoided a clean breakout. Closing above the interim range doesn’t qualify as a breakout, but extending higher Wednesday could marginalize sellers in the near-term.
Otherwise, a top continues forming. Breaking back down without further delay would be an entirely credible start to a durable downleg. But probably only if gapping down, since sellers didn’t gain traction for their efforts Tuesday.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2191.00 | 2188.75 |
| …would target | 2197.00 | 2195.00 |
| Bias-down: under | 2184.75 | 2182.75 |
| …would target | 2179.25 | 2177.00 |
| Signal status: LATE BIAS-DOWN | 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.
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))
Not yet exploiting the failed breakout Monday suggested the gap back to Thursday’s close would be filled before another downdraft could be credible. Tuesday’s gap up didn’t extend, and only ranged narrowly sideways.
Gold Aug Contract (GC, ETF: (GLD))
Reversing back down after Tuesday to fulfill the 1329.00-1332.00 target area cannot be relied upon to recover, since Tuesday filled the gap back up to Friday’s close. Having neutralized its attraction above through the close, a break lower can extend down.
Silver Sep Contract (SI, ETF: (SLV))
Firming at Tuesday’s open helped to confirm Monday’s touch of the 18.75-18.85 target area’s upper-end was relevant. Firming only slightly at Tuesday’s open suggested the target area’s lower-end would be tested, too.
30-year Treasury Sep Contract (US, ETF: (TLT))
Pulling back overnight to 171-22 before opening back at the 172-16 buy signal made its breakout more credible. Its attempt attacked 173-04 resistance before dipping back down to 172-16 as support. Closing back under 171-22 would put into play fresh lows.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending down overnight increased the potential for a second consecutive lower close Tuesday, which would confirm Monday’s break back under 47.45 had reversed momentum down. Headlines triggered a surge back up to 48.00 resistance — not necessarily confirming Monday’s break, but not rejecting it, either.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Monday’s unlikely gap up to retest 2.70 resistance was followed the less likely extension higher overnight. Trending up Tuesday tested 2.75, which puts into play filling the gap back up to 2.98 — assuming no reversal down Wednesday.