S&P
The First Trade… Bearish is bullish, and vice-versa.
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…
Friday’s 15-point gap down to 2090.00 didn’t extend down immediately, but eventually it extended down a lot. The mid-morning bounce to 2094.00 was reversed to the afternoon’s 2079.50 low. Too late for counter-trending to gain traction, the final hour bounced to 2088.50, fulfilling the corrective bounce target.
Overnight action’s new info…
Sunday night’s open gapped down to 2081.00. That was extended gradually overnight to probe under Friday’s low down to 2077.00 just ahead of Europe’s opens. It’s support, being is this morning’s bias-down target. Recovering to fresh overnight highs that attacked 2085.00 didn’t prevent reacting down again to 2078.00. But that’s now being retraced to 2083.00.
If, then…
Last night’s path is tracking the template we discussed during Saturday Review as being the most likely for a bullish resolution. Of course, until the open it’s still somewhat similar to the bearish template. First, reacting down Sunday night validated that Friday’s late bounce was only a correction. Also, probing Friday’s low has been defended by a bounce, and its fresh high proves it was not arbitrary. But the bullish template shouldn’t isolate the support test to overnight, which the current bounce is attempting. Not retesting Friday’s low post-open before bouncing and delaying fresh lows intraday would likely only contribute to an afternoon bearish scenario.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2086.75 would be unlikely to trigger the 2082.00 bias-down signal at 10:15. Exiting the open under 2080.50 would be likely to trigger bias-down.
Globex chaRTroom link
The tragedy in Orlando suggests tonight’s 6:00PM et Globex open will be anxious. Europe’s opens may contain the most substantial reaction to pro-Brexit sentiment surging in the polls. Not much longer after that, soon after the U.S. open, we’ll see whether the bearish sentiment has been expended, or if it attracts new sponsorship.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2103.00 | 2093.00 |
| …would target | 2108.75 | 2098.75 |
| Bias-down: under | 2092.00 | 2082.00 |
| …would target | 2087.00 | 2077.00 |
| Signal status: waiting for trigger | 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)
Friday morning’s post-open bounce fulfilled its intention of lulling market participants into complacency before a capitulative afternoon drop. But a capitulation isn’t very capitulative if it’s not maintained. The last half-hour’s recovery back into the noon hour’s range all but erased that capitulation’s effects
That said, the late bounce was probably only a temporary corrective bounce. Its 2088.25 peak was calculated from a correction of the afternoon’s 10-point drop to 2079.50. Holding it to the tick — twice, recovering it after a 3-point interim dip — is the best confirmation available until the next open.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Join us at 9:30am ET for the Saturday Review when we look at the bigger picture and your stock chart requests in the chaRTroom here.
Pre-close View… Kicked when it’s down.
Afternoon slide worsens the overnight drop.
Having anticipated the downside to unfold quickly if it unfolded at all, lower and lower lows through the afternoon help to confirm the trend is now down. Downlegs have been capitulative, but a late surge could still retrace enough ground to limit the afternoon’s damage.
Now probing 2083.50 resistance just before the position-squaring window opens, extending higher without delay is necessary to avoid new session lows. And new session lows signaled under 2081.75 would be likely to slide through the close.
Regardless, today’;s low can’t serve as a durable bottom, so be aware that any bounce is a temporary correction.