S&P
Post-open Review… Old stomping grounds.
Surging back to prior failure levels.
This morning’s Employment Situation report was greeted by an 11-point pullback to 2476.00, that was firming back up to 2480.50. The knee-jerk reaction attacked 2470.00 a couple of times, 
while consolidating more and more narrowly around 2480.50.
Opening higher soon extended back up through overnight highs. Touching yesterday’s 2489.00 intraday high maintained its recovery through the opening 15 minutes of volatility to avoid undermining the rally’s sponsorship. Soon 2503.00 was being tested.
Another reaction down had potential to form a temporary correction. Temporary, because maintaining the open above yesterday afternoon’s bias environment high has formed a “session-long rally” setup. The reaction’s correction lasted almost an entire minute as Fed Chair Powell said something hawkish that triggered a 6-point spike down to 2487.50.
Powell kept speaking, and subsequent headlines were more rally-friendly, if not actually dovish. A 34-point surge is just tested the past week’s highs around 2521.00.
Reacting down to 2408.50 could develop into a deeper pullback — fulfilling not the target but the purpose of the earlier pullback that Powell’s first headline had hijacked — now targeting 2492.50-2495.50. Back above 2515.00 first could resume the rally, targeting 2525.25.
The First Trade & Pre-open Tour Recording… Creating a buffer.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Wednesday’s gap down to 2490.50 was in recovery mode from having attacked Tuesday night’s 2452.00 low down to 2462.50. Its blip-up to 2493.00 began collapsing almost immediately to probe fresh lows down to 2447.00. Recovering almost all of it by noon proved only temporary, as the balance of the session trended back down. The close was overlapping the morning’s low down to 2443.00, after having stopped optimistically short of even touching it during the final hour.
Overnight action’s new info…
Firming through the Globex open up to 2456.00 was reversed to probe yet more fresh lows down to 2438.50. But only temporarily, as firming again was consolidating up to 2462.00 by midnight. And that soon resumed its recovery to attack yesterday’s highs up to 2487.00.
If, then… (notes to accompany the Tour recording)
Stopping optimistically short of retesting Thursday morning’s low had made the overnight dip likely. Its probe was relatively shallow and brief before reversing back up into Thursday’s range. Although just another version of optimism, it hasn’t been ineffectual. That hasn’t prevented rallying so much into so weighty of a report as the Employment Situation report. It’s yet another version of optimism, and potentially bearish from a contrarian perspective. Potentially. Maintaining the open back above Thursday afternoon’s ~2474.00 high could form a “session-long rally” setup. Meanwhile, touching yesterday morning’s 2489.00 high during the open would require its recovery to be maintained, too. Rejecting either setup, or both, would have a lot of room to expend selling pressure before challenging yesterday’s lows. But a deep enough retracement this morning would remain vulnerable to extending down into the afternoon.
First Trade…
[Click here to view the Bias parameters] No preliminary indications are considered ahead of Employment Situation reports.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2460.25 | 2460.25 |
| …would target | 2469.50 | 2469.50 |
| Bias-down: under | 2441.75 | 2442.00 |
| …would target | 2432.25 | 2432.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
The new year’s second session began with a second gap down, after probing the intraday lows overnight. Tuesday night’s 2452.00 low was lower, but it was probed Thursday morning. There was a second recovery back above “higher prior lows,” which was maintained Wednesday, but Thursday’s resistance held as resistance.
Of course, buying pressure was pretty well expended. The resistance of Thursday’s higher prior lows was tested by a 42-point rally from the 2447.00 morning low up to 2489.00. Which was retraced almost entirely to attack 2448.00 during the final hour.
There the market sat through the close, paralyzed by anxiousness ahead of Friday morning’s Employment Situation report, more so than by Capitol Hill theater. Stopping optimistically short of touching or piercing the morning’s low suggests at least an overnight dip is likely. But a bullish resolution all but requires greeting the open already rallying to and/or through Thursday afternoon’s ~2474.00 high.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
An overnight dip to 1.1380 support was recovered overnight and extended higher Thursday to test Wednesday’s 1.1475 opening high. All attractions below are neutralized, so trending back down again anyway would be bearish.
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s post-close dip from 1284.00 to 1280.50 was recovered overnight to trend up Thursday morning to fresh highs testing 1295.00, keeping alive momentum to the 1319.50 target.
Silver Mar Contract (SI, ETF: (SLV))
Still extending higher beyond Tuesday’s minimum required third higher close tested 15.80 Thursday, avoiding a sell signal on the same day as printing a new high.
30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s confirmed breakout extended higher overnight and then sharply higher intraday Thursday to 148-14, up +1-3/4 point on the day and easily fulfilling the minimum requirement for at least an eventual third higher close. Friday morning’s Employment Situation report is being greeted from a position of strength, which doesn’t preclude a knee-jerk reaction down, but makes it likely to recover.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still hovering around the 47.00 buy signal Thursday isn’t any more credible for breaking higher prior to a corrective dip first testing the 43.35-44.15 pullback limit. EIA is delayed until Friday this week for the holiday, and it is not being greeted from either a position of weakness or strength.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s fresh low down to 2.88 was still testing prior intraday lows to avoid greeting Friday’s delayed EIA report from a position strength. But closing above 3.15 would help to seal a bottom, or at least to start forming a bottom that launches another upleg.