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))
While Monday night’s fresh high proves that sellers aren’t exactly retaking control, not yet extending higher or reacting down sharply also reflects the current range’s attraction. Trending away from it the first time will likely retrace entirely.
Gold Apr Contract (GC, ETF: (GLD))
Probing higher overnight was largely retraced into Tuesday’s open, which then extended down to the 1253.00 pullback limit. Bouncing from there stopped just short of a second consecutive higher close, but the door open to retracing the recent breakout to 1244.00 and 1225.00. Extending higher anyway would target 1270.00 and potentially 1286.00.
Silver May Contract (SI, ETF: (SLV))
Extending higher Tuesday instead of rejecting Monday’s close above 15.88 has confirmed a breakout, requiring at least one more higher close, and targeting 16.30 or 16.85.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday’s test of the 165-12 pullback limit was retested down to its 165-11 low Tuesday morning. And then lower, targeting 164-12/164-20 until recovering back above Monday afternoon’s 166-16 high.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s breakout and Monday’s confirmation weren’t optimal, but extended higher Tuesday anyway, filling the gap above at 42.00-42.35. It also fulfills the minimum third higher close of Friday’s confirmed breakout. The breakout and confirmation weren’t optimal, so the recovery remains vulnerable to reversing down quickly, and back under 41.90 would signal momentum reversing down.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday to and through 1.95 helped to offset Monday’s gap down, and to confirm the pullbacks have been from positions of strength. But a second consecutive higher close would be helpful confirmation to finally launching the next upleg.
Look ahead: Economic Calendar – for Wed Apr 13, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s afternoon’s Beige Book is reliable for both inhibiting and then triggering price action. The pre-open PPI also influences price action, and its reaction is often duplicated by other econ reports before and after the open. The mid-morning’s EIA report is likely to have an impact, too.
MBA Mortgage Applications
7:00 AM ET
Retail Sales
8:30 AM ET
*PPI-FD
8:30 AM ET
Business Inventories
10:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
*Beige Book
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2057.25 | 2050.50 |
| …would target | 2062.75 | 2056.25 |
| Bias-down: under | 2048.75 | 2042.25 |
| …would target | 2044.25 | 2037.50 |
| Signal status: noN-BIAS, TESTED BIAS-UP 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… It’s only getting started.
Post-open action tracks its pre-open description.
I highlighted two warnings during the pre-market Tour. First, that delaying a probe under 2034.00-2035.00 would lack sponsorship capable of trending down. Second, it’s time for a session with multiple intraday reversals.
While both characteristics have defined post-open action, there’s so much more than that.
The 2038.00 open first rallied to 2043.50 before reversing back under the morning’s 2041.50 bias-up signal. That first reversal had extended down to test 2034.00-2035.00 when “no-bias” triggered, putting into play an offsetting test of the 2029.75 bias-down signal.
2032.50 was touched when the next reversal came. First surging to test the 2041.50 bias-up signal by 1 point was retraced to attack 2034.00-2035.00. That allowed me plenty of time to point out that a fresh high would target 2044.50-2046.00.
In fact, the morning’s 2046.50 bias-up target was touched. Exiting the bias environment above it would invalidate whatever had been put into play by holding its 2041.50 signal through 10:15. Offsetting test of the bias-down signal? Moot. No-bias trending above the bias-up signal? Moot.
So, is everyone ready for another intraday reversal? The recovery is no more durable than the drop preceding it. Reacting sharply from one extreme to another is natural for a trading range. Not necessarily the extreme extremes, but internal extremes.
Now reacting much more often and more steeply is building up energy to break an extreme extreme. At least, to break it temporarily before reversing much more substantially in the opposite direction.
Pre-market Tour (recording & summary)
Posturing for sellers to retake control had to begin quickly upon retesting the 2043.00 overnight high. And it did. But 2034.00-2035.00 is only now being attacked, and not even to within 1 point. Trending down sharply through the open could still be credible for sellers to gain traction. Otherwise, 2034.00-2035.00 could launch a temporary bounce before sellers get their next opportunity when the afternoon bias environment lapses.
Details and other markets coverage are discussed in the pre-market Tour recording here.