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))
Already extending higher Monday night to gap up Tuesday put the session on-track to fulfill the required eventual third higher close from Wednesday’s confirmed breakout. A pullback has room below to test “lower prior highs” at 1.1230 without reversing momentum down.
Gold Feb Contract (GC, ETF: (GLD))
Reacting down from just below the rally’s 1203.00 target didn’t get very far before trending back up into Tuesday’s open. The intraday action ranged narrowly sideways.
Silver Mar Contract (SI, ETF: (SLV))
Testing the rally’s 15.45 target Monday didn’t extend any higher overnight. Ranging sideways through the day kept alive potential for probing higher, but makes higher highs more vulnerable to reacting down sharplyl.
30-year Treasury Mar Contract (US, ETF: (TLT))
Having blown through the rally’s original 162-24 target last week up to 164-07, and then probing that Monday up to 166-01, extending sharply higher Monday night to 167-09 isn’t terribly shocking. Or shouldn’t be. But the rally’s relentlessness is nonetheless impressive, as it repeatedly holds pullback limits, which is now 165-08/165-12. Under 164-28 would start to signal momentum reversing down.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Failing to hold the new 29.55 pullback limit Monday night broke lower Tuesday morning and extended down sharply into the afternoon to 27.75. Fresh lows under 27.56 are targeting 26.40, with room for noise around that down to 25.65.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Dipping Monday night to test 2.06 support rallied Tuesday morning to 2.13. But the balance of the session settled back down to the 2.10 pullback limit.
Mid-day Update… Wide open spaces (Also: Programming Note)
Bias-down target met, held, and reacted.
[This morning’s pre-market Tour recording file was incorrect. I had updated its link in the blog post and sent a follow-up post which I’m hearing some did not receive. If you’re among them and interested, then here is the Tour.]
THE POST-MARKET WRAP WILL BEGIN 15 MINUTES BEFORE THE CLOSE AT 3:45 ET.
Reacting down from this morning’s test of the 1856.50 bias-up target fell all the way to the 1834.50 bias-down target. Its recovering into the bias environment exit tested 1851.00.
Not volatile enough? Sliding from there into and out of the noon hour triggered the afternoon’s 1834.50 bias-down target and met its 1829.25 bias-down target (to within 1 tick). And despite this still being a bias-down environment, probing above its bias-down signal just touched 1848.00.
As suspected this morning, today’s market has no interest in sitting still, and it has a wide range to do it. But it is not trending. It is neither extending yesterday’s decline nor is it reversing up.
One theory being mentioned in the chaRTroom is Yellen’s congressional testimony tomorrow. Regardless, the bias environment is now within view of lapsing 10-15 minutes from now. Extending to either end of today’s range would have a better chance at trending through it.
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1854.00 | 1848.25 |
| …would target | 1859.25 | 1853.50 |
| Bias-down: under | 1840.255 | 1834.50 |
| …would target | 1835.00 | 1829.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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… Locked-in tight.
Pre-open slide is retraced post-open.
I described during the pre-market Tour how neutralizing an attraction can allow price to react in the opposite direction. It had happened overnight when overbought RSIs at yesterday’s 1855.00 high was retested overnight, sending price back down.
One condition usually isn’t sufficient. So, retesting overbought RSIs extended to also test the resistance of this morning’s 1856.50 bias-up target.
Then price reacted down.
And down. This morning’s open was greeted with already having retraced yesterday’s weak-handed rally, back to its origin. That attraction below had been neutralized. The open’s blip-down also touched the 1825.75 support that had attracted yesterday’s decline.
Then price reacted up.
And up. While we’re not expecting yesterday’s rally to resume — it originated so late that its sponsorship must have been weak-handed — there was still room to rally back to the range’s highs.
In fact, the overnight high was touched. It reacted down soon enough to avoid triggering bias-up (the grace period was invoked, and late no bias was triggered). Now the 1840.00 bias-down signal is being tested as support.
Exiting the bias environment at 11:30 back under the 1834.50 bias-down target would start to suggest the decline is resuming — whether or not today.
Corrected link to pre-market Tour recording.
Details and other markets coverage are discussed in the pre-market Tour recording here.