S&P
The First Trade… “If you can keep it.”
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…
Lacking a single-minded relentless overnight rally didn’t deter Thursday’s intraday action from once again rallying sharply to fresh recovery highs. The open’s gap up to 2068.00 first reacted down 7 points to fill the gap back to Wednesday’s 2062.00 cash session close. Then the balance of the day resumed the rally. The last 60-90 minutes consolidated pessimistically short of touching last Thursday’s 2089.75 “higher prior lows.”.
Overnight action’s new info…
Uncharacteristically narrow ranging developed mostly between 2085.00-2088.00. Dipping through Europe’s opens down to 2081.50 was recovered back into the earlier range, and now the range’s upper-end is being probed by fresh highs attacking 2090.00.
If, then…
Is it only a correction, or a recovery back to week’s highs? “The latter, madam, if you can keep it.” The maximum corrective rally had room up to last Thursday’s 2089.75 higher prior lows, or else last Thursday’s 2119.50 post-close highs would become targeted up to 2125.25. Stopping pessimistically short of the resistance yesterday afternoon is potentially bullish from a contrarian perspective. Even the most bullish resolution doesn’t preclude a temporary detour back down, like to 2071.00, whether from only attacking 2089.75 or after probing above it intraday. A more serious reversal down should have greeted today’s open already in decline, which doesn’t seem likely now.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2091.00 would be likely also to trigger the 2092.50 bias-up signal at 10:15. Exiting the open under 2084.25 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2101.00 | 2092.50 |
| …would target | 2106.75 | 2098.25 |
| Bias-down: under | 2089.75 | 2081.25 |
| …would target | 2083.50 | 2075.00 |
| Signal status: BIAS-UP, BIAS-UP 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)
Recall from last weekend’s Saturday Review that there is no bearish reason to revisit last Thursday’s 2089.75 lower-end. That’s not the actual session low, but it is the relevant support being tested at the time.
Now this Thursday’s bias environment exit has stopped pessimistically short of touching 2089.75. Only by 1 point, 2-3 times. A last-minute 3-point spike up did probe it, but nothing that originates within 3 minutes of the cash session close is relevant.
Actually touching 2089.75 would all but ensure probing above last Thursday’s highs, probably up to 2125.25. Possible paths and possible consequences were discussed during an extended post-market Wrap.
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… Don’t look down.
Fresh highs withstanding rejection.
The afternoon’s 2083.00 bias-up target wasn’t exceeded through 1:20, so no higher target was put into play. But it was still a bias-up environment, and fresh highs were probed up to 2088.75.
The bias environment started lapsing at 2:30 back in the noon hour’s range. That could have become very bearish if the final hour were entered back under the bias environment’s 2081.25 low.
But lower lows were avoided, and the final hour was entered back at the bias environment’s high.
That hasn’t yet extended higher, or reversed down. But not exploiting that window’s reversal opportunity should be rewarded by higher highs. Breaking lower anyway would be likely 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))
BOE hinted at a round of QE Thursday morning and drove the Pound down. ECB suggested the same one hour later and drove down the Euro, too. The two prior sessions had expended buying pressure without gaining traction, and both are required to probe last week’s lows, which may be fulfilled by week’s end.
Gold Aug Contract (GC, ETF: (GLD))
Wednesday’s shallow gap up to 1329.60 instead of through it had failed to invalidate Tuesday’s close under the 1322.40 pullback limit. The same buy signal above 1329.60 would be credible Friday without Thursday’s probe back under 1322.40 making fresh lows.
Silver Jul Contract (SI, ETF: (SLV))
Wednesday’s surge to fresh highs was consolidated Thursday. Not reacting down doesn’t preclude a delayed reaction, but it does make a delayed reaction down likelier to recover.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday’s dip under the pullback limit extended down overnight to 171-01 and to touch “lower prior highs.” Friday’s 173-06 gap up was retested on the way up to 173-23, which reacted back down to 172-00. Back under 171-00 would seal a top, without first testing 174-24.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s bounce to 50.00 reacted down to touch the adjusted 48.75 sell signal. A valid trigger at this stage of the pattern should have extended down decisively by the close if valid.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength likely to absorb an initially negative knee-jerk reaction down. But not from a strong enough position to exploit a knee-jerk reaction up. So the retest of Wednesday’s high reacted back down into the rally’s 2.86-2.91 target area.