S&P
Post-open Review… Fulfilling potential.
Open’s surge evolves into bigger rally.
The open’s surge through 1907.00 was only temporary, despite touching 1911.75. Its reaction down fell to 1904.00, but in a singular leg that was still overlapping 1907.00 at 9:45.
So, 1907.00 wasn’t recovered, but neither was it rejected.
Being a singular downleg, it was still the first reaction down from the previous trend’s extreme. That leg has a horrible track record of triggering a durable reversal signal. Even the most bearish scenarios tend first to retrace the first reaction by 61.8%.
So, reversing down was even less likely.
The optimal pullback would have stopped 4-6 ticks higher. Nevertheless, not triggering a sell signal by 9:45 had further marginalized sellers. Triggering a buy signal extended higher toward the next higher objective at 1920.00.
1920.00 has been attacked to within 6 ticks. Back under 1915.25 would trigger a corrective dip targeting 1911.00. Simultaneously overbought 1-minute and 3-minute RSIs at the high would require its retest, presumably up to the 1920.00.
Pre-market Tour (recording & summary)
The pre-open consolidation finally broke higher to fulfill its minimum 1907.00 objective, up to 1908.75. That’s a good start at this stage of the pattern for resuming the rally without delay. But that also depends on extending through1907.00 through the open. Otherwise, it’s as good a start to trending back down through the morning.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Onwarded and upwarded.
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…
Tuesday morning’s gap up preserved much of the holiday rally. But post-open action dipped. Not immediately — in fact, late enough to indicate its sponsorship was weak-handed and temporary. It was meanwhile productive, but testing the morning’s 1871.50 bias-down target launched a reversal that stopped less than 1 point short of holiday’s high at 1892.00 where the afternoon ranged sideways.
Overnight action’s new info…
Tuesday afternoon’s ranging soon broke higher to 1897.50. That was already calculated to be this morning’s bias-up target. Then it broke lower to test this morning’s 1882.00 bias-down signal. Rallying into and out of Europe’s opens has extended to 1905.75.
If, then…
Despite buyers not gaining traction yesterday afternoon, a reward was still in order for having absorbed the morning’s dip. Its minimum higher objective at 1907.00 is being attacked pre-open. And despite buyers not gaining traction yesterday, the rally can resume immediately by gapping up. And by maintaining the gap up.
First Trade…
Exiting the open at 9:45 above 1907.00 would suggest the balance of the morning will extend higher, potentially targeting 1920.00. Exiting the open at 9:45 under 1898.25 would be unlikely to exceed the 1897.50 bias-up target at 10:15, and then not to renew the bias-up signal.
Post-market Wrap (recording & summary)
Buyers didn’t gain any traction for Tuesday’s efforts. That’s based on the bias environment’s exit still overlapping the noon hour’s range, and the final hour’s entry overlapping both. And that’s surprising, considering their rescue of the morning’s dive.
The morning’s dive was sponsored by weak hands, so its recovery wasn’t surprising. Its reversal stopped 3 ticks short of the 1982.75 overnight high, not necessarily due to pessimism, so a higher high isn’t required. But it wouldn’t be surprising.
None of which equates to being a sell signal. But extending higher without one would all but require gapping up, or at least probing higher overnight.
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))
The reaction down from last week’s 1.1385 high was extended coming out of the weekend down to 1.1133. The high formed an Island, which would be retested upon recovering 1.1270.
Gold Feb Contract (GC, ETF: (GLD))
The holiday weekend was exited by reacting back down to 1191.50 that had preceded last week’s blow-off to 1264.00. Closing back above 1222.50 would target the gap back to last Wednesday’s 1240.00 open.
Silver Mar Contract (SI, ETF: (SLV))
Having held 15.80 resistance at Friday’s close, the reaction extended down to 15.15 coming out of the weekend. Tuesday consolidated the drop but left no new signal.
30-year Treasury Mar Contract (US, ETF: (TLT))
Still lacking a catalyst for flight-to-safety, breaking under 167-18 support quickly extended to test last week’s “lower prior highs” at 166-10 and lower to 165-02. Any lower would trigger a much deeper decline — which suggests that this support’s test will launch a recovery back to Thursday’s 170-00 gap up.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming out of the weekend and surging early Tuesday up to 31.53 reversed back down back to 28.80, and closing any lower would target a retest of 26.40 down to 25.63.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Although the reaction to Thursday’s EIA report had already filled the gap back to its prior week’s 1.97 low close, and Friday didn’t extend lower, coming out of the holiday did break lower to 1.88.