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))
Wednesday’s opening bobble at least didn’t extend the test of 1.1010 resistance, whose test should not further delay launching a downleg if the 1.0750-1.0785 pullback target remains in-play.
Gold Feb Contract (GC, ETF: (GLD))
Sliding sharply at Wednesday’s open probed into the 1057.00-1061.50 support whose break would target 1039.00-1041.00. Even that extra leg to fresh lows could still be part of a bigger bottoming pattern. Closing above 1074.00 and not under 1057.00 would be more assured of a bottom.
Silver Mar Contract (SI, ETF: (SLV))
Having failed Tuesday to reject Monday’s plunge, probing fresh lows Wednesday at 13.80. It must be rejected without delay to avoid probing new lows.
30-year Treasury Mar Contract (US, ETF: (TLT))
A second consecutive lower close was avoided Wednesday despite probing fresh lows in the morning. So, Tuesday’s breakout was not confirmed, which would have required at least an eventual third lower close.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already having reacted poorly to a bearish Saudi production announcement, the reaction to Wednesday’s bearish EIA report was expected only to be emotional, and temporary. Testing 36.50, there is still room down to 36.00, but not really any reason to avoid rallying.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping down Wednesday created an Island ahead of Thursday’s EIA report. But so long as 2.14-2.23 were to hold as support, then the news is being greeted from a position of strength. Islands are made to be retested, whether or not on the way to higher highs.
Look ahead: Economic Calendar – for Thu Dec 31, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s post-open PMI report is released earlier to its institutional clients, which often triggers a reaction in the markets that is duplicated when released publicly. The afternoon rig count can be relevant, too, since Crude Oil has been influencing price action and the Rig Count has been influencing Crude Oil.
Jobless Claims
8:30 AM ET
*Chicago PMI
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Mid-day Update… and an announcement.
Market Wrap starts half-hour early at 3:33pm ET.
Also, I’m away from screens between 12:35 – 1:45 ET.
This morning’s 2061.50 bias-down target has held its test. But its test has not been rejected. The morning’s bias environment did react up to 2066.50, still 1 point short of the bounce preceding 2061.50.
But no higher. And no lower.
Exiting the bias environment in rally mode would have reversed momentum up. That didn’t happen, so entering the noon hour above the open’s 2068.00 highs would have made fresh highs likely. Didn’t happen either, so exiting the noon hour above 2070.50 would be optimal for confirming the uptrend has resumed.
There’s otherwise no requirement to trend down — only the greater vulnerability so long as yesterday afternoon’s upside traction isn’t being influential.
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2076.50 | 2069.00 |
| …would target | 2081.25 | 2074.00 |
| Bias-down: under | 2068.25 | 2061.00 |
| …would target | 2062.50 | 2055.00 |
| Signal status: NO-BIAS | 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… Grudgingly lower.
Bias-down target met, RSIs firm, bad news discounted.
The shallowly weak open at this morning’s 2068.00 bias-down signal immediately extended to fresh lows at 2064.00 and lower. A bounce reversed down even lower. The 2061.50 bias-down target was just touched.
The bounce attacked the bias-down signal to within 2-3 ticks at 2067.50.Having resolved in a fresh low, recovering 2067.50 would still be credible for reversing momentum back up. This may be today’s only remaining path to probing above yesterday’s highs. RSIs weren’t oversold at the low, and back above 2063.75 would start to signal momentum reversing back up
Also potentially bullish is Crude Oil’s reaction to a bearish EIA report. We discussed that possibility during the pre-market Tour. An emotional reaction would be likely, but likely only temporary, as the news would follow two earlier bearish items (API and Saudis) that are already discounted. If Crude isn’t actually extending down, then stocks have a chance to bottom.
Otherwise, no lower objective is in-play. But not signaling a recovery could simply drift lower.