S&P
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1950.50 | 1942.50 |
| …would target | 1956.00 | 1948.00 |
| Bias-down: under | 1935.25 | 1927.25 |
| …would target | 1929.00 | 1921.00 |
| Signal status: NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS | 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)
All of Thursday morning’s rally from its 1945.00 low up to 1969.00 was retraced before entering the afternoon bias environment. The 1931.00 overnight lows were retraced entirely, too. But that last bit came after the 3:10-3:20 timing window.
Sellers are still hesitant. Still reluctant. Optimism isn’t necessarily alive AND well, but it’s alive. And that’s still bearish from a contrarian perspective.
Greeting Friday’s pre-open Employment Situation report even more optimistically can’t be discounted. An initially favorable knee-jerk reaction can’t be discounted. But there’s about 15 points of room for noise above Thursday’s close to 1948.00-1951.00 without even beginning to reverse the trend up.
And there’s a whole weekend of illiquidity just several hours following the news.
The next lower likely support is at 1907.00-1912.00. But the market still isn’t tracking any recovery template, and this is all in the context of presumably duplicating and magnifying August’s plunge.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Hope springs eternal.
Rally’s complete failure still finding buyers.
This morning’s rally from gapping down was more productive than yesterday’s. It peaked earlier, and its reaction down probed negative territory sooner. Lest we think buyers have been conditioned yet to expect an extended decline, there’s another bounce underway.
But the bounce is the product of conditioning, too. A much more developed conditioning effort, which is the 3:30 rally. Of course, it’s not reliable or consistent, but patient sellers are smart to step back while the dip is retraced.
The retest of the overnight 1931.00 low by 3 ticks has reacted up to 1942.25. Although the bias environment exit was under the noon hour’s low, confirmation during the 3:10-3:20 window was slow.
Perhaps the hesitation in extending down is only due to tomorrow morning’s Employment Situation report. Regardless, there is still no template with a reliable path back up at this stage of the pattern.
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 gap back to 1.0855 was filled before Thursday’s open. Retracing it through 1.0905 suggests an earlier gap up to 1.1000 will be filled also before likely resuming the decline.
Gold Feb Contract (GC, ETF: (GLD))
Thursday’s gap up trended higher intraday for a second consecutive higher close confirming Wednesday’s breakout. At least a third higher close or more is required before a reversal down would be credible for extending. Meanwhile, upside potential on this leg is to the 1137.00 area.
Silver Mar Contract (SI, ETF: (SLV))
Recovering back to prior highs is being suggested by Thursday’s test of 14.10, whose recovery nearly filled the gap back up to 14.40.
30-year Treasury Mar Contract (US, ETF: (TLT))
Another overnight drop encouraged another flight-t0-safety Thursday that pushed price well above its last relative highs of 155-14 and 155-29 to 156-25. Most of which had been retraced into the open. But closing back above 156-14 would likely retest 156-25, before reversing down to fulfill “unfinished business below” that is left outstanding.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Breaking sharply Wednesday under 36.00 extended down further Thursday morning to test support around 32.00. Resistance is at 33.55 was tested, but ultimately held, keeping alive the likelihood for at least one more lower close.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
The reaction to Thursday’s EIA report wasn’t down, although that likely would have been absorbed, if not also reversed up. Returning back to recent highs above 2.38 does posture the pattern to break higher without further delay, to avoid a deeper correction.
Mid-day Update… Buy, dog! Bad dog!
Gap-down buyers learning to get out sooner.
The 1948.50 open rallied 21 points to 1969.00. That’s bigger than yesterday’s post-open 17-1/2 point rally. But it’s weaker, in two regards.
First, yesterday morning’s gap down was bought almost all the way through the morning’s bias environment. This morning’s rally peaked at least 20 minutes sooner.
Second, while both reactions down ultimately extended back under their opening prints, yesterday’s probe came during the afternoon bias environment lapsing. Today’s probe under the morning’s low has come during the afternoon bias environment’s entry.
The latest sell signal triggered under 1963.25 before the morning’s bias environment began lapsing. It has already produced a 29-point drop to 1934.00. If sellers are being conditioned alongside buyers, then they’ll be increasing pressure —
— especially as the weekend’s illiquidity approaches exponentially faster with each passing minute. Steeper selling into 1932.00-1939.00 target area suggests the conditioning is complete.