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))
Tuesday initially began retracing Monday’s firming — at least, correcting back towards last week’s lows. Reaction to Yellen’s noon hour comments triggered a surge attacking the 1.1335 attraction above. That’s now likely to be tested prior to a deeper pullback first, so also likely to be forming a top.
Gold Apr Contract (GC, ETF: (GLD))
Tuesday morning’s probe above 1223.00 resistance touched 1229.00 before correcting back under 1223.00. The next break above 1223.00 on Yellen’s comments surged to test the 1240.00 area. A second consecutive higher close Wednesday would confirm the pullback had ended and the rally had resumed. No higher close would target at least a retest of 1223.00.
Silver May Contract (SI, ETF: (SLV))
Probing well under 15.25 Tuesday morning was recovered in reaction to Yellen’s comments. Closing above Monday’s 15.88 high would have been more credible. But closing under 15.25 Wednesday would be unlikely to pause again before probing under 14.90 or lower.
30-year Treasury Jun Contract (US, ETF: (TLT))
Testing 163-16 again finally broke higher, aided by Yellen’s comments. A second consecutive higher close Wednesday would confirm a bottom had formed, just ahead of Friday’s payrolls report. Closing back under 163-16 would suggest otherwise, but fresh lows still aren’t in-play without also closing under 162-07.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s attack on 38.00 was probed under 38.00 Tuesday, after Sunday night’s probe above 39.55 failed into Monday’s open. Closing back above 39.55 would still target 42.00-42.35 where a more durable top could form.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
The 1.85 challenge may be resolving higher as Tuesday’s probe above it extended higher intraday. A second consecutive higher close on Wednesday would confirm the 1.99 target is in-play.
Mid-day Update… Two bounces do not a trend make.
Yellen reaction triggers extra surge.
This morning’s bias environment exit absorbed a test of 2027.25. It later served as the inflection point to a 7-point surge triggered by Fed Chair Yellen’s remarks. That extended during the noon hour to touch Sunday night’s 2039.75 high.
12-points into positive territory. Quite an improvement from this morning’s 9-point probe into negative territory.
But negative territory and 2027.25 weren’t recovered until after the bias environment had lapsed. Extending higher later is likely to be retraced entirely.
The noon hour’s reaction down from 2039.75 touched this afternoon’s 2033.50 bias-up target as support. A buy signal was triggered back above 2036.25 targeting the high’s retest up to 2041.50. Back under 2033.50 would target 2029.50, and potentially lower.
Look ahead: Economic Calendar – for Wed Mar 30, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s ADP report is the best last chance to gauge sentiment ahead of Friday’s payrolls report. Influential reports keep coming, with the weekly EIA report and an afternoon Fed speaker.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
*EIA Petroleum Status Report
10:30 AM ET
*Charles Evans Speaks
1:00 PM ET
7-Yr Note Auction
1:00 PM ET
Farm Prices
3:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2038.00 | 2028.50 |
| …would target | 2042.75 | 2033.50 |
| Bias-down: under | 2031.00 | 2021.75 |
| …would target | 2024.75 | 2015.25 |
| Signal status:BIAS-UP, BIAS–UP TARGET EXCEEDED | 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… Ill-fated bounce, again.
Post-open dip tries recovering too little, too late.
The pre-open dip to 2020.75 was itself probed post-open down to 2019.25. Yesterday morning’s 2023.00-2023.00 lows held as resistance through the opening 15 minutes of volatility.
Rather than extend down, a bounce has attacked 2027.00. Still overlapping the 2024.50 bias-down signal at both 10:15 and 10:30 has triggered noN-bias — not a bias-down, and not a no-bias, so there is no requirement to fulfill any bias parameter.
The pattern is similar to yesterday. Not the formation, which is clearly different. But the template of remaining under a relevant level through a relevant timing window, and then trying to recover.
Like the rally from yesterday’s lows, this morning’s recovery attempt should be retraced entirely. Unlike yesterday’s rally — so long as the bias environment isn’t exited above 2027.25 — the failure should not be so delayed. The initial attraction below is 2020.75, and then essentially 2009.00.