S&P
Post-market Wrap (recording & summary)
The sum of Monday’s rally was more substantial than its parts, and it contained some very substantial parts:
Reacting up from the overnight low’s test of 2059.50, reacting up quickly from the open’s test of 2067.50, entering the morning’s bias environment back in positive territory and soon following that with a probe above last week’s 2081.75 high… And that was just by mid-morning. The afternoon attacked 2089.00.
But upside momentum may not escape near-term jeopardy — although buyers gained no traction for their efforts, that didn’t prevent eking out fresh highs into the close. Extending the rally higher without delay requires gapping up, or else a pullback to “lower prior highs” at 2076.00-2077.00 would be likely.
Any deeper of a pullback would make near-term recovery difficult, especially if not launched by gapping down. The most bearish scenario would try probing higher Tuesday morning, anyway, without gapping up from new sponsorship, and without buyers already gaining traction.
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… The best is yet to come?
Probing fresh highs at an appropriate time.
Overbought RSIs at the noon hour’s 2087.0 high didn’t require a retest, but they made it difficult to reverse down. Now they’ve been neutralized by fresh session highs by more than 1 point higher.
The no-bias environment is lapsing. Exiting it above all prior timing window highs on a trending session can be even more difficult to reverse down. That doesn’t prevent dips, but it makes buying dips attractive.
Meanwhile, this morning’s upleg can be duplicated on the next run, whether or not today. But that’s the second likeliest scenario compared to simply ranging flat-to-higher.
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 Mar Contract (EC, ETF: (FXE, UUP))
Despite last week’s confirmed break of the 1.1345 sell signal requiring an eventual third lower close, Monday firmed back up to the sell signal. Still, nothing prevents probing higher in the interim, or requires immediately fulfilling the objective.
Gold Apr Contract (GC, ETF: (GLD))
Friday’s overly-optimistic gap up from only attacking 1224.00 to 1234.50 had reacted down, and the overly optimistic reaction down had recovered to fresh highs that ended back at 1234.50. Similarly, gapping up Monday to test 1241.00 resistance also reacted down to 1234.50. A test of 1224.00 remains in-play, and likely to be probed by several dollars.
Silver May Contract (SI, ETF: (SLV))
Monday’s firm morning held the 15.25 pullback limit that keeps in-play the higher objective up to 15.85.
30-year Treasury Jun Contract (US, ETF: (TLT))
Pulling back from Friday’s test of 166-16 resistance down to 165-20 could have launched a new upleg Monday, but probing it under 165-12 essentially targets a more thorough test the 164-12/164-20 pullback limit that had been tested to within 1 tick last week.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down sharply Sunday night and extending down to 37.60 didn’t prevent recovering to 38.50 by Monday’s open, and or entirely back to Friday’s 40.40 close that had triggered the 40.80 sell signal. A second consecutive lower close could still confirm the breakout, but more backing-and -filling wouldn’t negate the new attraction below at Monday’s gap down.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Monday’s firming didn’t recover 1.95 or recover from probing a fresh low, either of which would signal the pullback had ended.
Mid-day Update… Looking for sponsorship.
WedEX is done, no matter how aggressive its product.
The bullish WedEX’s influence on this morning is obvious. Recovering from a deep gap down is irrelevant. But rallying 18 points from 2066.00-2084.00 still doesn’t reflect the rally’s strength. Its buy signal at 2068.25 didn’t violate a pullback limit before touching 2087.00 during the noon hour.
Pullback limits were tested, but never probed deeper than their first 3 minutes. Even the mid-morning Symmetrical Triangle that broke falsely down was still so shallow that its pullback limit held before reversing back up more substantially.
The bullish WedEX’s influence is done. It would have no predictive value by having been any more or less aggressive and productive. But the morning’s singular sponsorship is very revealing. It suggests that reacting down would be only temporary, and recovered by a new upleg with greater measurements than this morning’s upleg.
One caveat is that this morning’s rally must not be rejected by the close. Probing above Thursday’s 2079.75-2081.75 highs must hold as support. Closing in negative territory back under 2073.50-2074.75 would reverse momentum down. Overbought RSIs at the noon hour’s high don’t require a retest, but that does make reversing down more difficult.
Look ahead: Economic Calendar – for Tue Apr 19, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Intel’s earnings come after Tuesday’s close, which might inhibit afternoon volatility. A lot of insurance companies report before the open. Othewrise, the econ calendar’s items have no track record of influencing intraday price action.
Eric Rosengren Speaks
Mon 7:00 PM ET
Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET