S&P
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))
The ongoing narrow trading range had tried breaking higher three times, and the first two times never reacted down under the range’s lows. The third breakout attempt also reacted back into the range, but then gapped down under it Wednesday to test the 1.1345 sell signal down to 1.1300. Confirmed by a second consecutive lower close Thursday would require an eventual third lower close. Otherwise, the breakout attempt will have held a test of support to make a rally leg even more likely, which would be signaled back above 1.1420.
Gold Apr Contract (GC, ETF: (GLD))
After only touching the 1253.00 pullback limit Tuesday, Wednesday’s open gapped under it and extended down enough to fill the first of two gaps below at 1244.00. The next lower gap at 1224.50 is in-play so long as 1253.00 isn’t recovered.
Silver May Contract (SI, ETF: (SLV))
Diverging from Gold and breaking higher Wednesday could fulfill the minimum requirement for a third higher close after Monday’s confirmed breakout. But there is still potential for extending to 16.85.
30-year Treasury Jun Contract (US, ETF: (TLT))
Closing Tuesday under the 165-12 pullback limit that had held Monday has put into play a lower objective at 164-12/164-20, but Wednesday’s low came within only a quarter-point before bouncing back up to 166-00. Closing above 166-16 would signal that the corrective dip had ended.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already having met and held the 42.00-42.35 bounce target Tuesday, extending higher Wednesday was unlikely. Reaction to the morning’s EIA report left the upside target still attracting price to it, and now back under 41.20 would signal a downleg underway.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday above 1.95 and trending higher intraday, then surging into the close and firming further Wednesday, all matched last week’s temporary rally effort that was retraced back down under 2.00. Closing higher Wednesday instead confirms Tuesday’s rally and makes fresh highs likely.
Mid-day Update… No rush.
Hovering above prior highs would satisfy objectives.
The post-open dip to 2064.00 had been recovered to the open’s 2070.50 high. A break higher as the morning’s bias environment began lapsing extended to 2073.75. Dipping into the noon hour consolidated between 2068.00-2071.00, triggering no-bias.
The high’s RSIs aren’t entirely overbought to require its retest. But ranging narrowly sideways through the close isn’t as likely as printing fresh highs — targeting 2074.25-2075.00. Perhaps the Beige Book release at 2:00 would be a catalyst.
Dipping back down into the range could still fulfill the “unfinished business above” of a new trend high close. Preferably, that close would be above the opening range’s 2070.50 high, since the open’s range was overlapping the prior high.
The rally might extend even higher, but it wouldn’t be required. This isn’t a Friday, but exiting the afternoon’s bias environment above prior timing window’s highs (i.e. 2073.75) would be bullish. Reacting down from Beige Book would still be likelier to recover.
Look ahead: Economic Calendar – for Thu Apr 14, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Two Fed speakers and a couple of high-profile reports are released pre-open. Only one has a track record for influencing price action, but being released simultaneously might increase their impact. The morning’s two Fed speakers are scheduled simultaneously, too. A shame they won’t cancel each other out.
*Consumer Price Index
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*Dennis Lockhart Speaks
10:00 AM ET
*Jerome Powell Speaks
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2081.50 | 2075.00 |
| …would target | 2086.75 | 2080.25 |
| Bias-down: under | 2074.75 | 2068.25 |
| …would target | 2069.50 | 2063.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Why this time may be different.
Slowness to extend gap up may be its strongest element.
I noted earlier the three immediate prior sessions. Their gaps up were ultimately reversed, but not before extending higher during the open and opening hour.
Today’s gap up to 2065.00-2065.75 quickly extended higher, probing the 2069.25 overnight high by more than 1 point during the first half-hour. Quickly extending higher didn’t translate into an uptrend, and the first hour really only ranged narrowly between 2067.25-2069.75.
And now a break lower is touching a fresh post-open low at 2064.00. Is the three-session streak turning into four?
Probably not. One obvious difference between today’s gap up reversal is its origin. The three immediate prior sessions had been contained within the range. Today’s high probed all prior highs first. That allows more room for selling without it damaging the chart.
As for that selling, its 2064.00 target was just touched. Whether or not it’s retested, the most bullish scenario at this stage of the pattern would keep pullbacks shallow. Filling the gap back down to yesterday’s close wouldn’t help to maintain the degree of optimism that upward momentum requires.
Back above 2966.75 (being tested now) would start to signal the pullback was done, and that momentum was beginning to reverse up. Having stopped pessimistically short of touching last week’s 2071.50 “new Globex trend extreme,” the open’s 2070.50 peak probably won’t be able to offer much resistance.
Otherwise, exiting the bias environment under its 2062.25 bias-up target would suggest that buyers are done. Especially with Crude Oil already having met and held its target yesterday, a downleg would unfold quickly.