S&P
Pre-close View… Ahead of schedule?
Extra selling pressure may have stretched the rubber band.
While retesting 2153.50 was able to include 2147.00-2148.00, its test extended down to 2141.50 coming out of the noon hour.
That extra selling pressure would be bearish, if the extra break were maintained. And it may yet be. But the bias environment bounced up to 2151.50.
The bounce gained no traction. The bias environment exit was still within the noon hour’s range, and the final hour’s entry dipping back into the bias environment’s range. But a squeeze into the close is still possible if the 3:10-3:20 window were to probe higher. That’s not looking good.
Back under 2147.00-2148.00 could resume the decline to test the low’s oversold RSIs, and probably also to trend down into tomorrow’s open. There’s otherwise no requirement to resolve in either direction, and a likelihood to at least test today’s lows before being able to recover.
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))
Monday’s inside day resolved by gapping up Tuesday above Thursday’s high. Since that had held a test of prior highs, at least a corrective dip to fill the gap and test “lower prior highs” back down to 1.1185-1.1200 is likely regardless of the ultimate resolution.
Gold Aug Contract (GC, ETF: (GLD))
Having extended higher Monday despite Friday already fulfilling the minimum required third higher close, the uptrend was signaled to be intact. Tuesday’s gap up extended sharply higher intraday to attack the next higher objective at 1375.50 to within 1.50, so reacting down if only to correct has become more likely.
Silver Sep Contract (SI, ETF: (SLV))
Gapping up Tuesday confirmed that Monday’s retest of prior highs and closing higher had resumed the rally, still targeting at least a retest of the Brexit reaction’s 21.15 high.
30-year Treasury Sep Contract (US, ETF: (TLT))
The 172-26/173-04 pullback limit was broken sharply overnight to gap down Tuesday back at the rally’s original 171-22 buy signal. Its reaction up pierced back above 173-00 momentarily. Closing above it Wednesday would suggest the pullback has ended.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
No fresh low overnight didn’t make the decline any less likely to extend lower, which it did Tuesday. Fresh lows attacking 39.15 extended nearer to this leg’s 36.60 target. Now bounces must hold 40.80 to maintain the decline’s momentum.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Fresh lows overnight probed the 2.77-2.80 pullback limit by a couple of cents. The reaction must still recover 2.80 to suggest the pullback has ended, and that 2.98 is in-play.
Mid-day Update… Gravy.
Extended decline is neutralizing many attractions.
Prior to today, the only required downside was a retest of Thursday’s 2153.50 low. The next lower objective under it was 2147.00-2148.00 This morning’s bias environment tested 2145.00, and the noon hour’s exit touched 2141.50.
The last two lows weren’t required to be tested. But selling pressure has been expended to test them, anyway. A clue to sellers becoming expended is this afternoon’s bias-down that was invalidated — triggering its 2143.50 signal by only 1 tick, and recovering back above it through 1:30.
Exiting the bias environment back above 2147.00-2148.00 would suggest that selling pressure is satisfied. Back above 2151.25 would start signaling momentum is reversing up. Meanwhile, the trend remains down, and fresh lows would next target the 2137.00 area.
Look ahead: Economic Calendar – for Wed Aug 3, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar is busy, and somewhat high-profile. But the only reliably influential econ report is the ADP number, and its reaction helps to fine-tune market sentiment ahead of Friday’s monthly payrolls.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2157.25 | 2151.25 |
| …would target | 2163.25 | 2157.25 |
| Bias-down: under | 2149.50 | 2143.50 |
| …would target | 2143.25 | 2137.25 |
| Signal status: BIAS-DOWN INVALIDATED | 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.