S&P
Post-market Wrap (recording & summary)
Monday’s “inside day” was a miniaturized version of the overnight choppiness. A lot of swings, but essentially unchanged. We caught all of the early clues for a dry cleaners morning — the difficulty in starting from a standing stop, the first hour’s 15-minute checkpoints, no-bias. The dry cleaner’s afternoon simply had to signal no-bias again.
Now the question is whether Monday’s late break resolved the range. Fresh session lows were being probed before coming to within 3 minutes of the cash session close. But only just before, and only by a little. So beware of another narrowly ranging dry cleaners morning Tuesday if the opening 15 minutes haven’t yet trended.
Meanwhile, an overnight detour down into Thursday’s range is possible, whether to 2039.50 or to 2034.00. Much lower, especially through the open, would not be likely to recover. But even from that low an overnight recovery would be possible, and so would gapping up above Monday’s 2054.00-2056.00 highs.
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… Tough work, if you try to get it.
Range bound morning, afternoon, and now final hour.
We knew of the potential dry cleaners morning after today’s first half-hour. We knew of the same potential for more narrow ranging this afternoon at 1:20. None of which is relevant during the final hour. Except that today, it is.
A session’s last 60-90 minutes is more about the segue into overnight and the next day. The dry cleaners afternoon doesn’t apply to it.
Except when morning AND afternoon narrow ranging aren’t resolved into the close. Consequently, the next bias environment tends to be another dry cleaners morning.
None of which precludes gapping up or down. But just as it was going to be difficult trending from a standing stop this morning, tomorrow morning it will be difficult trending out of today’s narrow ranging.
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 Jun Contract (EC, ETF: (FXE, UUP))
Monday’s open gapped down modestly back into Thursday’s range. So long as its recovery back into positive territory remained within Friday’s range, last week’s confirmed breakout still requires at least a third eventual lower close before a rally would be credible.
Gold Jun Contract (GC, ETF: (GLD))
Monday’s gap down retested Friday’s 1245.00 low down to 1243.50 low before bouncing, but maintains its target of 1241.00.
Silver Jul Contract (SI, ETF: (SLV))
Gapping down Monday to Friday’s lows didn’t create any new unfinished business below, and closing at or around 16.50 allows bottoming to form.
30-year Treasury Jun Contract (US, ETF: (TLT))
Firming Sunday night into Monday morning’s 164-26 peak was retraced back into negative territory, but bounced again back above the 164-17 buy signal. Two days of touching 164-17. and one day probing it, can’t afford any further delay in extending higher to avoid another downleg.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s weakness pierced the 47.75 sell signal and Monday morning ranged around it. Closing under it would be credible for extending down to fresh lows under 44.00, possibly first as an air pocket down to 45.40.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Closing above 3.05 Friday had signaled the decline’s momentum lapsed. Gapping up to 3.11 Monday creates the potential for launching a new upleg, which closing above 3.14 would confirm. Monday’s post-open action dipped back down to test 3.05 as support, which must hold to maintain the recovery potential.
Look ahead: Economic Calendar – for Tue May 24, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s housing sector report isn’t high-profile and has no track record for influencing price action. Although covering an earlier period, it might be considered relevant as a rate hike is being talked up.
Patrick Harker Speaks
MON 6:30 PM ET
Redbook
8:55 AM ET
New Home Sales
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Mid-day Update… Dry cleaners day?
The morning’s warning might also apply this afternoon.
Three of the first hour’s five 15-minute checkpoints overlapped the same relevant level, being Friday’s 2049.00 cash session closing equivalent. That suggested sponsorship was lacking, and that choppy ranging would be likelier than trending.
The dry cleaners morning only narrowed its range. Only after the bias environment began lapsing at 11:30 was trending attempted again. The reaction down from 2051.25 did pierce the morning’s low by 3 ticks down to 2045.75. But it hasn’t extended.
Fresh lows remain likely to test Thursday’s lower prior highs at or under 2039.50. At least a retest of overnight highs could be signaled above 2050.50. But there’s no requirement for either, so a dry cleaners afternoon can’t be discounted.