S&P
Market Wrap (recording & summary)
Each timing window of Friday’s session-long rally probed its prior timing window’s high. The usual noon hour exception probed fresh highs, but the afternoon bias environment did not. Which made the final hour likely to probe at least the afternoon bias environment’s high.
But the final hour did not probe fresh highs. Momentum had died out, exiting the bias environment within the noon hour’s range, and entering the final hour within the bias environment’s range. Successful session-long signals tend to extend through the following morning. Similarly, the missing window tends to be fulfilled the following morning, aggressively to compensate for the delay. The burden of proof is definitely on sellers.
Having closed above 2525.25, the next higher objective in-play is 2548.00-2555.00. Closing any higher would then target 2606.00, all within the context of being a temporary bear market rally.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US AT 9:30 ET FOR THIS WEEKEND’S SATURDAY REVIEW.
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))
Reacting down Friday morning to 1.1410 retraced Thursday’s recovery, which was itself recovered Friday back up to 1.1485 where any higher close should confirm a new rally leg underway.
Gold Feb Contract (GC, ETF: (GLD))
Probing 1300.00 overnight was reversed down Friday in reaction to the Employment Situation report to 1278.00, but recovered back above 1284.00 to keep alive the rally. Nevertheless, 1284.00 must continue holding as support to avoid a deeper reversal.
Silver Mar Contract (SI, ETF: (SLV))
Fresh highs overnight up to 15.95 reversed back down Friday to 15.65 in reaction to the Employment Situation report. But Friday’s intraday range was essentially an inside day compared to Thursday, so momentum has not reversed down.
30-year Treasury Mar Contract (US, ETF: (TLT))
Probing a fresh high overnight up to 148-27 was reversed down sharply in reaction to Friday’s Employment Situation report. A Double Bottom formed at 146-19 which is “lower prior highs” from Wednesday’s confirmation of Tuesday’s breakout. Closing back above 147-08 and 147-16 would signal the knee-jerk reaction had been absorbed and momentum was reversing up.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 43.35-44.15 pullback limit was ultimately attacked only to within 20 cents before greeting Friday’s delayed EIA report back in rally mode, retesting the 47.00 buy signal up to 49.25. Closing under 47.00 would increase the likelihood for testing the pullback limit. Closing above 47.00 would still allow the pullback limit’s test from a position of strength that is likely to recover.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
The delayed EIA report had little effect on price, which ranged narrowly sideways after having briefly probed a fresh low overnight. Closing above 3.15 would start to reverse the trend back up, or at least create a position of strength to help absorb further dips. Meanwhile, interesting research here on the possible cold wave coming.
Mid-day Update… Gotten ahead of itself.
Session-long rally already recovers its likely objectives.
Having trended down into yesterday’s close, exiting the open above yesterday afternoon’s bias-up signal formed a “session-long rally” setup. So, every timing window should probe the prior timing window’s high. Usually there’s one exception, and usually it’s the noon hour.
The noon hour probed fresh highs, so the exception will be either the afternoon bias environment or the final hour.
The bias environment is currently dipping, but it’s no too far removed from the high to probe it. Not probing a fresh high by 2:30 would be likely to probe fresh highs before the close. Probing fresh highs before 2:30 would be free to reverse down through the close.
Meanwhile, the room for noise above the past week’s highs up to 2525.25 has been exceeded up to 2539.25. Closing above 2525.25 would put into play 2548.00-2555.00. Closing under 2490.00 would reverse today’s rally.
Look ahead: Economic Calendar – for Mon Jan 7, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Neither of Monday’s post-open reports has its own reliable track record for influencing price action. But releasing simultaneously can have an effect. The noon hour’s Fed speaker just spoke on Friday, so the market is likely anticipating any specific comments.
Factory Orders
10:00 AM ET
ISM Non-Mfg Index
10:00 AM ET
TD Ameritrade IMX
12:30 PM ET
*Raphael Bostic Speaks
12:40 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2525.75 | 2526.00 |
| …would target | 2534.50 | 2534.75 |
| Bias-down: under | 2507.50 | 2508.00 |
| …would target | 2499.75 | 2500.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.