S&P
The First Trade… Warning shot.
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…
Bullish WedEX influence may have contributed to Sunday night’s strong rally. The influence likely contributed to Monday’s post-open surge up to 1943.00. Perhaps it required the surge’s reaction down to be recovered, which the afternoon did by 3 ticks. But WedEX influence had expired by then, so it didn’t require a new upleg. Monday’s relatively narrow ranging around Feb 1’s prior high persisted through the cash session close at 1942.00.
Overnight action’s new info…
Suddenly sliding 6-1/2 points into the futures close at 1935.25 was extended deeply overnight. Last Wednesday and Thursday’s “lower prior highs” were probed down to 1924.50 through Europe’s opens. That has been recovered back up to unchanged at 1936.50.
If, then…
The only immediate trend reversal setup is a gap down back to last week’s lower prior highs. The overnight drop showed it to be possible. Its recovery suggests it’s not probable. While simply piercing the prior high does fulfill the minimum requirement for a top, another higher high would be more appropriate before the next downleg begins.
First Trade…
Exiting the open at 9:45 above 1935.25 would be unlikely to trigger the 1933.00 bias-down signal at 10:15. Exiting the open under 1929.00 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1949.00 | 1946.00 |
| …would target | 1953.00 | 1952.00 |
| Bias-down: under | 1936.00 | 1933.00 |
| …would target | 1930.25 | 1927.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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.
Post-market Wrap (recording & summary)
Monday’s open gapped up considerably to 1932.00 and soon trended sharply higher to 1943.00. Still being governed by the bullish WedEX signal, a reaction down could not gain traction. And the reaction down to 1936.00 did not gain traction, instead recovering to a fresh session high at 1943.75.
Now a reaction down can gain traction. Not just trending down, but gapping back down under lower prior highs like 1923.00-1927.00 to form an Island. Otherwise, just dipping into their test would be attracted back up to Monday’s 1932.00 opening gap.
Overbought RSIs at Monday’s 1943.75 high require a retest, too. That can be neutralized overnight, although any complexity would require probing fresh highs intraday, whether only to 1946.00 or to 1952.00-1953.00.
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))
Monday’s open exploited the pattern’s vulnerability to plunging by gapping down after having trended down overnight. Gaps are leaving “unfinished business above” outstanding, and inihbiting the decline from extending much first..
Gold Apr Contract (GC, ETF: (GLD))
Falling Sunday night back under 1222.50 without recovering Monday is signaling the rally’s momentum has lapsed. Closing under 1216.50, too, would likely target 1195.00. Closing back above 1222.50 would resume the rally to 1942.00 and 1949.
Silver Mar Contract (SI, ETF: (SLV))
Gapping down Monday keeps alive potential for recovering to rtest last week’s high around 15.25.
30-year Treasury Mar Contract (US, ETF: (TLT))
Only a suspicious shallow dip accompanied stock futures soaring overnight. The weakness is suspicious because it almost qualifies as relative outperformance NOT during a filght-to quality.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight strength depesited Monday’s open more than $2 higher. It did not extend any higher intraday, which shouldn’t be productive anyway if a retst of the lows remains in-play.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
.No new strength Monday prevented the pattern from trending.At least another morning would be required.
Pre-close View… Hanging by a thread.
Almost no upside attraction outstanding.
Simultaneously overbought RSIs at this morning’s 1943.00 high required a retest. The bias environment probed it by 3 ticks.
That was a no-bias environment, and probing above its 1941.00 bias-up signal was doomed to failure. Often, the 1:20 bias timing print is retraced, too. And it was, at 1939.00, and lower back down to 1936.00.
Breaking under 1936.00 would have room down to 1927.00 and 1923.00. Otherwise, back above 1938.50 would start to signal a retest underway of session highs like 1946.00 and potentially 1952.00-1953.00.
Having probed January’s high, a top can now begin forming. I would still expect today’s gap up to be retested from below, eventually — either before a durable decline can begin, or on the way to sharply higher highs.