S&P
The First Trade… Champing at the bit.
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…
Gapping up 14-16 points Thursday would have rejected the ongoing downtrend. Wednesday’s night’s action fully tested that limit up to 2060.00, but greeted Thursday’s open at 2051.00. The morning slid back to unchanged around 2045.00, and the afternoon bias environment began by attacking Wednesday’s 2039.00 low to within 2 ticks. Two bounces testing 2045.00 defined sideways ranging into the close, as Friday’s approaching Employment Situation report inhibited trending.
Overnight action’s new info…
Thursday afternoon’s choppy ranging has essentially persisted, but decline seems eager to get on with it. Bounces still holding tests of the 2045.00 area. But their interim dips have probed momentarily to fresh lows at 2038.00. The latest bounce is being followed by a third drop to 2038.00, yet to recover.
If, then…
The decline has already identified its next objective at 2035.00 or 2030.00. I think the latter more so than the former, if not also lower to a 2027.00 handle. Buyers have ineffectually expended a lot of energy recently. Wednesday afternoon’s bounce had originated from just above 2039.00, where the bounce was retraced. Wednesday night’s bounce (and Thursday’s gap up) expended a lot of energy, too, also ineffectually, as we now know by its complete retracement to fresh lows. The ongoing decline should have little difficulty aggressively exploiting all of that failed buying pressure and chipping away at support, especially with the weekend’s impending illiquidity… If not — if the decline’s overnight eagerness becomes overly-pessimistic — then the likely alternative is a substantial rally.
First Trade…
Exiting the open at 9:45 above 2042.00 would be unlikely to trigger the 2041.00 bias-down signal at 10:15. Exiting the open at 9:45 under 2039.75 would be likely to trigger bias-down. Exiting the open under 2033.00 would be likely to renew the bias-down signal under its 2034.75 bias-down target at 10:15.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2056.75 | 2050.75 |
| …would target | 2062.25 | 2056.25 |
| Bias-down: under | 2047.00 | 2041.00 |
| …would target | 2040.75 | 2034.75 |
| Signal status: NO-BIAS INVALIDATED, TESTED BOTH BIAS-DOWN PARAMETERS | 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)
Had Wednesday night’s rally to 2059.50 been done intraday, then all available buying pressure would have been expended without gaining traction for the effort. Pre-open action was attacking the morning’s 2055.50 bias-up target, and exceeding it post-open could have renewed the bias-up signal. Either of those setups could have marginalized sellers.
Neither of which prevents recovering from lower lows. But both suggest that lower lows are still coming. Gapping up Friday above Thursday’s highs, if not also its pre-open highs — similar to Thursday — could still reject the decline. Otherwise, trending down into and also possibly out of the weekend is likely.
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… Imagining support.
Tomorrow’s payrolls report inhibiting attack on the lows.
Triggering this afternoon’s 2047.00 bias-down signal fulfilled its 2042.00 bias-down target to 2039.50, stopping optimistically short of touching yesterday’s low. Bouncing into and out of the bias environment lapsing attacked 2046.00.
Entering the final hour at 2042.00 extended down to 2040.00 before bouncing. Another drop has stopped optimistically short of its prior low.
Optimism can be bearish from a contrarian perspective. Not only in price structure as described above, but also compared to events. And tomorrow morning’s pre-open Employment Situation report is an event.
It’s not unusual for the payrolls report to inhibit volatility the afternoon prior. Maintaining a break in either direction is difficult. Choppy sideways trending through the close wouldn’t be surprising.
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))
Holding the 1.1485 sell signal’s test Wednesday could have been exploited by retesting the 1.1600 target, but Thursday’s open gapped down and extended under 1.1415 support.
Gold Jun Contract (GC, ETF: (GLD))
Closing back above 1282.70 Wednesday would have signaled momentum reversing up, but Thursday’s gap up above it still needed to extend higher through the close. Instead, it was retraced to probe under Wednesday’s low attacking 1270.00. Not immediately recovering 1282.70 could extend down to 1260.00.
Silver Jul Contract (SI, ETF: (SLV))
Gapping back up above the 17.50 pullback limit Thursday was not maintained after having failed to hold it Wednesday. It was reversed deeply enough only to fill the gap back to Wednesday’s close, which held, undermining the attempt to extend down.
30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday’s choppy ranging had avoided rejecting Tuesday’s gap up and post-open surge, essentially reconfirming the 165-06 target remained in-play. Thursday resumed the rally and fulfilled the target. The recovery could extend, so long as 164-28 holds as support instead of its break signaling momentum reversing down.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Thursday well above the 44.50-44.75 resistance that had held Wednesday would have been credible for extending higher and fulfilling the outstanding requirement for at least one more higher close. But post-open action slid back down to 44.00, filling the gap back to Wednesday’s late surge.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Thursday only made even likelier a knee-jerk reaction down after the morning’s EIA report So far, only the gap back down to Tuesday’s close has been retraced, but at least a test of 2.03 remains likely.