S&P
The First Trade… Make, or break. Or, both.
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…
The week began with a largely “inside day” contained within Friday’s range (the lone exception being the noon hour’s momentary 2183.50 high, if not counting the 2184.50 overnight high). A remarkable 6-7 intraday swings alternated between up and down, an orderly fashion usually reserved to trending action. Oversold RSIs were left outstanding at the 2175.00 late-morning low. The morning’s 2185.00 bias objective was left outstanding above..
Overnight action’s new info…
Flat-to-higher narrow ranging drifted narrowly into and out of Europe’s opens, and through Monday’s 2183.50 high. Surging an hour later touched 2187.25. Its 3-point reaction down was recovered entirely, briefly extending up to 2188.00.
If, then…
Having gained no traction yesterday, trending this morning requires gapping open beyond yesterday’s range. Overnight action indicates as much, at least at this moment. But overnight action is also hesitating upon filling the gap back up to last Monday’s 2187.00 close. Yesterday’s highs formed upon filling the gap back up to Friday’s close, which illustrates the difficulty in testing resistance intraday. Gapping up to and through 2187.00 would be more reliable for extending higher post-open. The minimum reward would be new highs, at least momentarily. Perhaps at most momentarily, as new highs would be vulnerable to reversing back down aggressively.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2187.00 would be likely to trigger the 2185.00 bias-up signal at 10:15. Exiting the open under 2182.00 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2187.25 | 2185.00 |
| …would target | 2192.25 | 2190.00 |
| Bias-down: under | 2179.25 | 2177.00 |
| …would target | 2174.25 | 2172.00 |
| Signal status: BIAS-UP, BIAS-UP EXCEEDED | 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)
Last Monday gapped up and quickly extended to new highs, spending the entire session above prior highs. That was followed by gapping back down under prior highs, and resuming the ranging that had preceded Monday’s failed breakout.
This Monday is in stark contrast. It was an “inside day” relative to Friday’s range. Five trending efforts alternated between up and down, and that was before even entering the afternoon bias environment. I dismiss that later legs because of their smaller sizes.
Also, this Monday ended almost unchanged, compared to last Monday’s gain. Does that difference, or the others, mandate any different resolution this Tuesday? No, the range and its choppiness can persist. But trending through either end of the range remains likely eventually, and possible during any timing window.
No traction was gained by either sponsorship Monday, so trending Tuesday morning must begin by gapping beyond either end of Monday’s range. Oversold RSIs at Monday’s 2175.00 late-morning low require an eventual retest, which would likely extend down several points deeper to 2172.00. Breaking lower could be easily satisfied, or not. Breaking higher would target new highs.
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… Olympic homage.
Record-setting laps.
Imagine today’s market to be an Olympic swimming pool. Now imagine today’s price action to be an event, like the 400m Medley.
The session has swum laps from side to side — some turns taking a little longer than others, but pretty quickly during each lap. The chart’s legs appears as alternating surges and collapses.
Almost each leg is shorter than the last. They’re converging at the 2180.00 area as the 3:10-3:20 proxy window elapses. The 3:37-3:52 position-squaring window follows closely behind it, and although no trending then is required, it would be credible for extending.
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))
Friday’s gap down an narrowly ranging session didn’t accomplish anything other than what it prevented from being accomplished — Thursday’s breakout wasn’t confirmed. Monday’s price action essentially duplicated Friday’s, so reversing momentum back down isn’t yet assured.
Gold Aug Contract (GC, ETF: (GLD))
Friday’s wide ranging had held its bounce limit, so Monday’s gap down under Friday’s lows was capable of extending down. It only ranged narrowly sideways under Friday’s lows, remaining vulnerable to extending down to the 1329-1332 target.
Silver Sep Contract (SI, ETF: (SLV))
Gapping down sharply Friday had all but required extending down next to 18.75-18.85. Gapping down sharply Monday probed the target area’s upper-end, and also confirmed Friday’s breakout from a multi-session range, requiring at least an eventual third lower close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping up Monday wasn’t the optimal recovery path from Friday’s probe of fresh lows, despite that probe not gaining traction through the close. But not gaining traction through the close is what enabled an immediate recovery to be credible, at all. Quickly recovering 171-26 helped to extend higher to test the 172-16 buy signal, which had held its test through Monday’s noon hour.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Rolling forward Monday from Sep to Oct, at a 60-cent premium, was accompanied by gapping down back into the 47.45-48.00 bounce target that had been probed into the weekend. Its lower end was attacked intraday, but must still be confirmed to consider the week-long rally as having ended.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Friday’s gap down under Thursday’s 2.61 low was a delayed reaction to not immediately rejecting the knee-jerk reaction to Thursday’s EIA report. The likely consequence was to fill the gap below down to 2.55 or lower. Closing back above Thursday’s 2.70 high could invalidate the downside, so it is interesting that Friday’s gap up into Thursday’s range touched 2.70. It’s recovery would still be bullish, but meanwhile the pattern remains likelier to produce fresh lows.