S&P
Mid-day Update… Gravity still sucks.
Unable to bounce off of morning lows.
Probing under this morning’s 2085.00 bias-down target wasn’t recovered in time to avoid renewing the bias-down signal. That essentially put into play the 2076.00 renewed bias-down target.
2076.00 was attacked, tested, retested and probed. It is still being tested as the afternoon bias environment is entered.
Avoiding lower lows is unlikely, despite this afternoon now being a no-bias environment. Whether it’s 2073.50 bias-down signal, or down to 2071.00, fresh lows would make a later recovery effort above 2080.00 more credible.
The risk in probing lower is in not recovering. The pattern’s structure requires recovering from a fresh low to form a durable bottom. But that’s also how a new downleg gets underway if not recovered.
Look ahead: Economic Calendar – for Wed Jul 6, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar wasn’t high-profile, while Wednesday’s is almost nothing but. Two pre-open speakers interrupt several econ reports, and then the afternoon’s FOMC Minutes is reliable for influencing price action.
MBA Mortgage Applications
7:00 AM ET
*William Dudley Speaks
8:00 AM ET
International Trade
8:30 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
Redbook
8:55 AM ET
*Daniel Tarullo Speaks
9:00 AM ET
*PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2093.50 | 2084.75 |
| …would target | 2098.50 | 2090.00 |
| Bias-down: under | 2082.00 | 2073.50 |
| …would target | 2077.50 | 2068.75 |
| 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… Sentiment stands.
Overnight slide extends to fresh lows.
The open was greeted at the 2085.00 bias-down target. Blipping-up to 2086.50 created a slingshot effect that plunged to fresh lows at 2077.50. And that is now probing lower to 2076.75.
2076.75 is within 3 ticks of what is essentially the 2076.00 renewed bias-down target. Both 1-minute and 3-minute RSIs diverged positively at the low.
Back above 2080.75 would signal at least a corrective bounce up to the 2085.00 bias-down target. Meanwhile, the trend may extend next down to 2071.00.
Pre-market Tour (recording & summary)
A reaction off of 2082.00 reached 2088.00 before reversing to fresh lows at 2081.00. All of which has been ranging around this morning’s 2085.00 bias-down target, which is being tested more narrowly just ahead of the open.
Nothing requires retesting the overnight low, or prevents rallying this morning. But renewing the bias-down signal would target much lower lows in the correction.
Details and other markets coverage are discussed in the pre-market Tour recording here.