S&P
Pre-market Tour (recording & summary)
The overnight low’s retest had reacted up to test 2073.50. It’s being retested now ahead of the open. Holding above 2071.00 and quickly recovering 2075.00 could marginalize sellers, at least until filling the gap back up to yesterday’s 2080.00-2083.00 closes. Otherwise, triggering bias-down could itself imply the bias-down target won’t hold, either.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Dancing on the edge.
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…
Ultimately trending down through July 4 greeted the holiday-shortened week gapping down 4-1/2 points under 2089.75. Its recovery through Friday’s close had created a requirement for eventually probing prior highs. Fresh lows into the afternoon attacked 2072.00, leaving no “unfinished business below,” but not forming a solid base. Bouncing into the close was unlikely to be maintained.
Overnight action’s new info…
Attacking 2085.00 resistance was reversed back down to probe well under Tuesday’s lows. A recovery began before midnight from 2067.50, probing a fresh high at 2085.75 through Europe’s opens. That sizable rally was rejected, dropping entirely back down to fresh lows at 2066.75. And now that sizable drop is reacting back up, at least to 2072.50.
If, then…
The most bullish scenario described during yesterday’s Wrap was to greet this morning’s open already in recovery mode from an overnight retest of yesterday’s lows. Price action through Europe’s opens seemed to be on that path, having reversed back up through yesterday’s close. Rejecting the entire overnight recovery could still try, try again. But triggering bias-down, even without renewing it under the target, could extend next to 2055.00-2056.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2069.25 would be likely also to exceed the 2071.00 bias-down target through 10:15 to renew the bias-down signal. Exiting the open above 2077.75 would be unlikely to trigger the 2076.00 bias-down signal at 10:15.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2096.50 | 2088.00 |
| …would target | 2102.75 | 2094.25 |
| Bias-down: under | 2084.50 | 2076.00 |
| …would target | 2079.50 | 2071.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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 week’s tremendous recovery of the Brexit reaction had been vulnerable to a pullback at any step of the way. By Friday, its potential was to 2076.00 or 2071.00. On Monday, it reached 2072.50.
Despite recovering intraday to 2083.50, it’s probably not a durable bottom. Recovering a little less a little earlier would have been more credible as strong-handed. So, retesting Tuesday’s lows before resuming the rally would help to launch the next upleg.
The next upleg remains likely to develop. The pullback into Tuesday’s lows originated from having closed Friday above 2089.75. The reward of probing the pre-Brexit high back to 2125.25 remains outstanding, and fulfilling it from this unfinished bottom would be doomed to failure.
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… Detour possible, barely.
Too late for more than an obligatory bounce.
The bias environment’s 2072.50 lows reacted up to 2079.00 before retracing entirely. And only entirely. Not pierced or probed by a fresh low, and not just attacked. Touched.
The next reaction up has recovered gradually to test 2078.00. That’s pretty good, for a bounce that wasn’t required, and which is likely to fail.
2078.00 could be probed aggressively (being tested now), without reversing back down before the close. It would likely not be durable, but it could be very productive meanwhile. Otherwise, back under 2075.00 would target 2071.00, if not also lower.