S&P
Pre-close View… Capitulation, shmapitulation.
Probing higher and higher highs.
Renewing the bias-up signal above its 2058.00 target didn’t prevent initially dipping. But it wasn’t likely to extend, and in fact held an attack on 2055.00. The bias environment ultimately probed higher to attack 2066.00.
The actual bias environment exit was overlapping the noon hour’s 2062.75 highs despite having probed 3 points highs. The final hour’s entry was back under the bias environment’s 2065.75 high despite probing more than 1 point higher. And now the 3:10-3:20 window has avoided extending to fresh highs.
Buyers aren’t gaining traction for today’s effort, they’re simply being fulfilled. None of which is a sell signal. Tomorrow’s open could still extend the rally by gapping up. Otherwise, a retest of 2043.00 remains likely.
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))
Gapping down again Thursday was not necessarily more counter-trend action, since Wednesday’s low had stopped optimistically short of actually filling the gap back to Monday’s close, and then filling the gap back up to Tuesday’s close had neutralized its attraction above. Bouncing intraday offers one more opportunity to bottom, by recovering from a retest of Thursday’s gap down.
Gold Aug Contract (GC, ETF: (GLD))
Wednesday’s post-close reaction to FOMC extended sharply higher overnight to probe the 1312.00 target to attack 1317.00. Its reaction recovered to fresh post-open highs attacking 1319.00. The next reaction down slid to 1293.00, and then lower to 1285.00 after the close. Thursday’s gap up to 1308.60 will need to be retested.
Silver Jul Contract (SI, ETF: (SLV))
Already meeting the 17.60 target before Wednesday’s close, extending higher overnight created more room for a pullback without beginning to signal momentum reversing down. But 17.60 was probed back down to 17.40.
30-year Treasury Sep Contract (US, ETF: (TLT))
Surging at Thursday’s open extended easily through the 170-16 resistance but stopped short of touching the 171-22 target before reversing back down intraday under 170-16.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Trending down overnight easily fulfilled the decline’s minimum objective at 47.25 before extending to test 46.15, likely on the way to test “lower prior highs” at 45.40..
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Reaction to Thursday’s EIA report was muted, as a lot of buying pressure continues being expended simply to hover at the highs. Extending higher to the 2.70-2.75 target is likely to hold and to reverse down.
Mid-day Update… Dry grass, meet lit match.
News greets decline’s target, corrective bounce ensues.
The decline’s 2043.00 target was identified originally while the rally was still topping at 2110.00. Potential for bottoming at 2063.50 was all but dismissed Tuesday.
Gapping down today made 2043.00 likely to be tested this morning.
And it was, down to 2040.75. But that doesn’t equate to being a bottom.
A bottom might have formed around 2043.00. Isolating its test to one timing window, retesting it during another, and recovering to close above the morning’s 2054.00 high.
Still possible. But more difficult.
Tragic news surrounding Brexit triggered expectations for delaying next week’s vote. That wouldn’t be bearish. Its rumors were like throwing a lit match into the thick forest of selling pressures, which had dried out when its target was met
The 2053.00-2054.00 open was being tested at the bias environment’s exit. The noon hour filled the gap back up to yesterday’s 2062.75 cash session close. Consolidating back down to the 2058.00 bias-up target held and the bias-up signal has been renewed.
If the recovery extends higher today, let alone tomorrow morning — entirely possible, especially with bias-up renewed — then it would be at the expense of forming a durable bottom. Not retesting 2043.00 today would make its future retest less and less likely to hold.
Look ahead: Economic Calendar – for Fri Jun 17, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Neither of Friday’s two econ reports are reliable for influencing price action, although surprises are easier without other context. Meanwhile, so-called Quadruple Witch expiration will be much more influential.
*Quadruple Witching
Housing Starts
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2061.00 | 2053.00 |
| …would target | 2066.00 | 2058.00 |
| Bias-down: under | 2052.00 | 2044.00 |
| …would target | 2046.75 | 2038.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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.