S&P
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))
Rallying sharply overnight on better polling for Brexit’s “remain” vote filled the gap outstanding from 1.1400. Closing higher Tuesday would signal a bigger rally underway, and not just a temporary corrective bounce.
Gold Aug Contract (GC, ETF: (GLD))
Brexit’s “remain” vote makes Gold less attractive, so tumbling overnight was a likely reaction. But the retest of Thursday’s low and the 1286.50 pullback limit held, and closing above 1295.00 would signal the high’s retest underway targeting 1308.50 and po9ssibly 1312.00.
Silver Jul Contract (SI, ETF: (SLV))
Not much Brexit exposure, so not much volatility Monday. A retest of 16.40 and 16.80 remains likely.
30-year Treasury Sep Contract (US, ETF: (TLT))
Rallying stocks had no need for a flight-to-safety, triggering a gap down under the 169-00 pullback limit being tested at Friday’s close. Any early strength Tuesday back above 169-00 would be credible for resuming the rally to its 171-22 target.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Testing the 48.00 bounce limit at Friday’s close was extra vulnerable to the weekend’s Brexit news. Gapping up and testing 49.00 Monday should be rejected back under 48.00 without delay to maintain near-term potential to test 45.00-45.40.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Last week’s shallow consolidation broke higher Monday morning and extended to test the 2.75 upper-end of long-standing target. Having been met quickly from the multi-session narrow consolidation, no second consecutive higher close Tuesday would make 2.47 and lower likely to be tested.
Mid-day Update… The other side of up.
Fresh post-open lows coming out of the noon hour.
Reacting down from 2092.50 never recovered. The 2084.50 opening print was retested, and held as support through the noon hour. Bouncing up to 2087.00 as the noon hour was ending had an opportunity to retest the highs.
But that was short-lived. Reacting down from 2087.00 probed a fresh post-open low — and the pre-open low, for that matter — down to 2082.00. The Pound suddenly collapsed simultaneously, so perhaps news is forthcoming on Brexit. Anxiousness ahead of Yellen’s testimony tomorrow could also be undermining the rally effort.
Regardless, the 2080.50 bias-down signal wasn’t touched, let alone triggered. This is a no-bias environment. Probing lower anyway would likely be recovered. Meanwhile, there is more room for noise to test this afternoon’s 2088.75 bias-up signal.
Look ahead: Economic Calendar – for Tue Jun 21, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s sole econ report has no track record for influencing price action. Much more relevant is Fed Chair Yellen’s first of the two-day semi-annual congressional testimony. Her opening remarks are scheduled to be embargoed until 10:00am.
Redbook
8:55 AM ET
*Janet Yellen Speaks – Senate
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2097.50 | 2088.75 |
| …would target | 2103.00 | 2094.50 |
| Bias-down: under | 2089.00 | 2080.50 |
| …would target | 2082.00 | 2073.25 |
| 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… Keep it coming (for now).
Overnight rally extends post-open.
It could have gone either way. It usually goes the other way. Otherwise, it goes this way.
Not every setup has a binary resolution that will trend in one direction, or the other. But often a single-minded, relentless overnight trend will reverse at the open. Not reversing tends instead to extend the trend almost as relentlessly. A third option is very unlikely.
This morning’s choice was to extend.
So, having pulled back already from 2087.50 to 2083.00, post-open action surged through its 2085.25 buy signal to probe a fresh high. And still hovering or extending more than halfway through the opening 15 minutes of volatility, reversing down became very unlikely. Inverting the bearish WedEX was required by noon Friday, so this rally only invalidates it.
Higher highs touched 2092.50, taking RSIs overbought. Reacting down is overlapping a 2087.25 sell signal by a couple of ticks. Back above 2089.50 would resume the rally, next targeting 2094.50.
Extending higher after this morning will be more difficult as Fed Chair Yellen’s Senate testimony tomorrow morning comes into view. Rate hike rhetoric between FOMC meetings suggests the market will be challenged by bearish headlines. That’s a difficult proposition to attract new buyers.