S&P
Post-market Wrap (recording & summary)
New trend high closes on Friday all but ensure another eventual higher close before becoming vulnerable to a durable downtrend. It doesn’t prevent an immediate pullback, but the pullback would likely be temporary.
Friday’s new trend high close did start to fulfill the next higher upside objective at 2067.00-2068.00 which would have been in-play Wednesday afternoon had its rally resumed.
Friday’s new trend high close was overlapping Wednesday’s prior high enough not to qualify as a breakout. That would have been bullish separately had Monday closed higher. But now closing higher Monday wouldn’t be any more bullish.
2056.00 was recovered through a close, which starts to suggest a new rally leg underway — not simply a single higher close. This would be undermined by only ranging Monday around last week’s highs.
Meanwhile, 2048.75 is “unfinished business below.” It must be retested for having been Friday morning’s bias-down signal, which was triggered late. But its retest is not required on any particular timetable.
I’ll send the link overnight to this weekend’s Saturday Review, which begins at 9:30am ET.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Pre-close View… Safety zone.
Entering final hour above all prior highs.
The afternoon bias environment begins lapsing at 2:30, and finishes upon entering the final hour. A trending session that probes fresh extremes during the afternoon bias environment can marginalize counter-trend sponsorship by maintaining its position.
Today, that means exiting the bias environment above the noon hour’s 2057.25 high has marginalized sellers. The rally need not extend but it probably won’t reverse down. It had extended already to 2062.75, so there is room for noise below.
Exiting the bias environment back within a prior timing window’s range would open the door to a reversal. Reversing wouldn’t be required, but it would be unlikely otherwise.
None of which prevents an interim dip, anyway. Ranging narrowly at 2062.75 for 45 minutes doesn’t make a dip any likelier, except that it suggests upside momentum may be in trouble.
Back under 2059.75 would be credible for a dip targeting 2056.00 with potential to 2051.00. It would likely be both temporary and brief, and recovered completely before the close. Meanwhile, the greater vulnerability remains to the upside.
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))
Gapping up a little ahead of Friday’s payrolls report was retraced back into Thursday’s range. Blipping-up filled the open’s gap before reversing down more substantially. Reacting back up never fully recovered, holding 1.1435 resistance. Closing under 1.1345 would signal momentum reversing down.
Gold Apr Contract (GC, ETF: (GLD))
Wednesday’s dip had already retested the upper-end of 1218.00-1224.50 support. Its test already produced a rally, back to prior highs,. There was no bullish reason to revisit it, so revisiting it Friday extended down to the range’s lower-end, and through it to attack 1210.00. Closing back above its upper-would still be bullish — in fact, a bounce was testing 1224.50 as resistance before the close. But closing under 1218.00 would signal a new downleg underway targeting 1188.50-1192.50.
Silver May Contract (SI, ETF: (SLV))
Closing Thursday above 15.38-15.44 without trending up intraday had made its breakout all the more dependent on being confirmed by a second consecutive higher close. The alternative would target 14.70. It was attacked to within a dime after gapping down Friday, and remains in-play so long as 15.25 is not recovered.
30-year Treasury Jun Contract (US, ETF: (TLT))
A second consecutive higher close Friday would confirm Thursday’s breakout above 164-10, next targeting 165-20, and then 168-00.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Delaying a recovery from retesting the 38.25 prior low has opened the door to triggering a donwleg under 36.95 targeting 34.00 and 32.00. Having tested 36.95 intraday Friday, only closing above 38.25 would reject the new downside risk, and closing above 39.05 would target a retest of 42.00-42.35.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Thursday’s dip back down to 1.93 wasn’t absorbed immediately and was still being tested throughout Friday morning. It must hold to maintain the bullish scenario next targeting 2.07 and higher.
Mid-day Update… Morning-long.
Substantial rally fulfills its upside.
Recovering 2038.50 after twice probing fresh lows post-open had suggested a substantial morning-long rally would develop. This being a Friday, the morning’s bias is likely to extend into the afternoon.
The morning’s late bias-down signal contradicted the bullish scenario. But the requirement to retest this morning’s 2048.75 bias-down signal can become “unfinished business below.” And it has.
Meanwhile, a noon hour pullback fulfilled its minimum objective at 2050.50. Its recovery has extended to fresh session highs at 2058.50 and triggered late bias-up. The 2061.25 bias-up target is in-play.
Look ahead: Economic Calendar – for Mon Apr 4, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Mid-morning is an unusual time for a Fed speaker, especially on a Monday, so that might have extra influence on price action. Otherwise, it’s Monday’s only relevant econ report.
Gallup US Consumer Spending Measure
8:30 AM ET
Labor Market Conditions Index
10:00 AM ET
Factory Orders
10:00 AM ET
*Eric Rosengren Speaks
10:15 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET