S&P
The First Trade… Overnight optimists.
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…
Day-to-day reversals, intraday reversals, and now overnight reversals, each had begun appearing within the week-long range before Monday’s open. The latter’s appearance — Sunday night’s reversals — warned us not to trust Monday’s gap up. Our distrust proved well-placed, as the 2048.00 open’s extension to 1256.50 was reversed down to 2042.00 by noon. Its recovery to 1251.00 also proved untrustworthy as it was reversed down to 1233.50 into the close.
Overnight action’s new info…
Initially extending down to 2029.25. Its reaction extended higher to 2041.00 at Europe’s opens. Tumbling quickly back down to 2032.50 proved only temporary, recovering as quickly and then extending to a fresh high at 2043.00.
If, then…
Sellers had not gained traction before Monday’s last downleg broke lower during the final hour. Extending down immediately this morning would require gapping down to fresh lows. Retracing yesterday’s last downleg overnight doesn’t yet prevent gapping down to resume the decline. But it does put that decision to the intraday crowd, instead of it being forced on them by overnight sponsorship — and that makes the setup more reliable. It also presents the opportunity for a “session-long rally” setup. But if the decline is extending, then the overnight recovery should begin melting away now
First Trade…
Exiting the open at 9:45 above 2044.50 would be likely to trigger the 2041.50 bias-up signal at 10:15. Exiting the open under 2039.25 would be unlikely to trigger bias-up.
Post-market Wrap (recording & summary)
Monday’s “ineffectual optimism” was neutralized, filling the gap from Friday’s 2040.75 close back down to the 2039.00 area. And lower, to 2033.50, despite sellers not having gained traction — the bias environment exit was above the noon hour’s high and the final hour’s entry was no lower. Extending the decline Tuesday morning must begin by gapping down, or else be likely to recover any lower low, if not also launch a recovery.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2048.75 | 2041.50 |
| …would target | 2053.75 | 2046.50 |
| Bias-down: under | 2037.00 | 2029.75 |
| …would target | 2030.00 | 2022.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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.
Pre-close View… Sunny side down.
Ineffectual optimism is the recovery’s biggest threat.
Despite a gap up, delaying its extension higher had suggested that buyers were weak-handed. They disappeared entirely when the 2055.00 renewed bias-up target was tested by 6 ticks by 10:15 instead of exceeded. The morning’s bias environment fell to 2041.75.
Despite that still being positive territory, delaying a recovery suggests that buyers are expending energy without gaining traction. The noon hour’s bounce tested the afternoon’s 2049.75 bias-up signal by 6 ticks but wasn’t triggered at 1:20. The afternoon’s bias environment fell to 2043.50.
Despite both the bias environment exit and final hour’s entry not gaining traction, fresh afternoon lows are being probed. Not fresh session lows — at least, not yet. In addition to those two instances of “ineffectual optimism” already neutralized, the gap back to Friday’s 2040.75 close has been threatened for quite a while.
The lack of traction may prevent extending down substantially before tomorrow. But filling the gap back to Friday’s close, down to 2039.00, is still likely today.
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 delayed reaction to a top at 1.1435 has undermined the topping pattern, so Monday’s probe of fresh intraday highs has potential to extend into a new upleg. It stopped pessimistically short of touching last week’s overnight probe of fresh highs at 1.1475, so any higher would likely extend.
Gold Apr Contract (GC, ETF: (GLD))
Friday’s reaction up from the 1234.50 long-entry had already fulfilled the 1255.00 minimum objective overnight, but extended intraday to also fulfill the 1260.00 upper-end of its potential. Closing back under 1253.00 would signal that momentum is reversing down to fill gaps back to 1244.00 and 1225.00 instead of extending higher to 1270.00 and potentially 1286.00.
Silver May Contract (SI, ETF: (SLV))
Friday’s close above the 15.25 bounce limit was extended Sunday night and then higher throughout Monday morning to 15.99. Closing back under 15.88 would signal the bounce had peaked, and probably reversing down to resume the decline targeting 14.70.
30-year Treasury Jun Contract (US, ETF: (TLT))
Bouncing Sunday night to 166-25 didn’t prevent resuming the pullback targeting 165-12, which was then fulfilled Monday morning. Reacting up tested positive territory above at 166-15.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Ranging around the 39.55 buy signal Friday was not rejected, and extended slightly higher Sunday night to test 40.75 intraday. That officially confirms Friday’s signal, but not convincingly, especially since neither session trended post-open.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Despite the intraday uptrend Thursday after gapping up above 1.95 resistance, and then Friday’s gap up, Monday’s open gapped back down under 1.95. The gap back to Wednesday’s 1.90 close was filled.