S&P
Pre-market Tour (recording & summary)
The reaction down from retesting yesterday morning’s 2072.75 high is extending to 2067.50 pre-open. That’s under the 2069.75 bias-up signal, but not yet deeply enough to inhibit triggering it an hour from now. Its greater challenge is to generate sponsorship with this afternoon’s FOMC events looming. Not triggering it would make yesterday’s lows likely to be attacked or probed.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Hope keeps springing.
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…
Hope sprang eternal Tuesday, to the extent possible for trading almost entirely in negative territory. Gapping down to 2065.00 bounced immediately, filling the gap from Monday’s 2069.75 close up to 2072.75. Sliding sharply to 2054.75 into the bias environment exit reacted up again to the 2065.00 open. The final hour was greeted back at the morning’s 2054.75 low, which then bounced throughout to within 2 points of Monday’s close.
Overnight action’s new info…
Encouraged by China devaluing the Yuan to its lowest levels in 5 years, hope is springing overnight, too. Globex dipped initially to 2059.75 which retraced 61.8% of Tuesday’s final hour rally. Since that correction, the balance of the night has rallied. Yesterday morning’s 2072.75 high was retested by 2 ticks before dipping 3 points.
If, then…
Closing above yesterday morning’s 2072.75 high would have sealed a bottom by holding the test of 2063.50. No opening strength today can serve by proxy, because it would leave outstanding a gap back to yesterday’s lower close. And that’s assuming the overnight rally can even extend above yesterday morning’s high. If there’s something to be said for positioning ahead of a relief rally to be triggered by this afternoon’s likely FOMC inaction, then it goes equally to sell strength when anxiousness ahead of the news paralyzes price action. Probing higher this morning is possible, but unlikely to resolve favorably. The most bullish template would probe intraday under yesterday’s lows, and then recover to close above yesterday’s highs.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2072.75 would be likely to trigger the 2069.75 bias-up signal at 10:15. Exiting the open under 2066.50 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2079.00 | 2069.75 |
| …would target | 2085.00 | 2076.00 |
| Bias-down: under | 2069.50 | 2060.50 |
| …would target | 2062.25 | 2053.00 |
| Signal status: BIAS-UP | 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)
2063.50 was tested, probed thoroughly, all without closing under it. But it is still in the process of being tested, and did not necessarily hold. So the premise remains that a deeper drop targeting 2043.00 is underway.
No early strength Wednesday would qualify as a delayed signal that 2063.50 had held as support. Gapping up could extend higher before the afternoon’s FOMC events, but that would create “unfinished business below” back down to Tuesday’s close. Delaying a rally until late-afternoon would be credible for extending.
Otherwise, fresh session lows Wednesday are likely — whether that creates another opportunity for 2063.50 to ultimately hold, or confirms that 2043.00 remains in-play.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Monday’s gap up helped to invalidate Friday’s break to fresh lows, and to keep alive the likelihood for retesting last week’s 1.1400 high close. Gapping down Tuesday to retest Monday’s lows must avoid closing negative to maintain that recovery potential.
Gold Aug Contract (GC, ETF: (GLD))
Choppy trading overnight and Tuesday didn’t reject Monday’s gap up and intraday extension, keeping alive this leg’s 1312.00 target.
Silver Jul Contract (SI, ETF: (SLV))
Tuesday’s fluctuation didn’t threaten reversing momentum down, which keeps alive the 17.60 target of this upleg.
30-year Treasury Sep Contract (US, ETF: (TLT))
Breaking above 168-00 Friday had signaled a new upleg underway, which was confirmed by not rejecting it Monday. Attacking 170-00 Tuesday must now hold 169-00 on pullbacks to maintain upward momentum next targeting 171-24.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s intraday bounce testing 49.00 was extended down overnight to fresh lows attacking 48.00. The session’s “ineffectual optimism” avoided fresh lows without any reward, so the decline should accelerate without delay if its momentum remains intact.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Still inhibited by the lack of any recent pullback, dipping prior to Tuesday’s open reveals the rally’s risk in trying to extend higher without a correction.