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 Dec Contract (EC, ETF: (FXE, UUP))
Rather than extend the corrective pullback any deeper first, Friday’s bounce filled the gap back up to Wednesday’s 1.1020 close. This is more suggestive of topping, so that the next decline is durable. Rejecting a probe above Wednesday’s high would have been more bearish, and still could be.
Gold Feb Contract (GC, ETF: (GLD))
Sliding sharply to attack 1061.50 support from Thursday’s close under 1074.00 was reversed up sharply to test 1077.77. Now a recovery is even more dependent on holding 1074.00 as support, if not also there being no delay to extending up through 1077.70.
Silver Mar Contract (SI, ETF: (SLV))
Friday’s gap down was within the prior range, but that didn’t prevent extending to fresh lows intraday. The pattern was not very responsive to Gold’s recovery, ending under prior lows. Its downside risk is in being confirmed by a second consecutive lower close Monday.
30-year Treasury Jan Contract (US, ETF: (TLT))
Delaying and backing-and-filling from attacks on the 156-12 target better enabled its eventual test to extend through it Friday. The breakout is next targeting 157-22 so long as pullbacks hold 157-04 as support. Closing under 156-15 would reverse the trend back down.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending down overnight to test the 36.25 target wasn’t rejected to close back above 36.70, which would have sealed a bottom. But the new low at 35.35 into the weekend reflects excessive pessimism when there is often a geopolitical risk premium. It is not quite a second consecutive lower close, but it is at least a breakout.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Two consecutive lower closes into the weekend now require at least an eventual third lower close.
Mid-day Update… More last gasps.
Bouncing out of the noon hour.
The post-open ranging had expended a lot of energy up to 2022.00. It succeeded in preventing the overnight decline from following-through under 2012.00.
A surge tested 2025.00, too late to have a bullish impact. Instead, it stretched the rubber band, which snapped back down to 2003.75 at the noon hour’s low.
Coming within 3 ticks of the 2003.00 bias-down target no longer requires its test. It would not become “unfinished business below” if left outstanding.
If it is signaled. Actually, it did barely. The 2009.50 bias-down signal WAs being overlapped within 3 minutes of the 1:20 bias timing window to invoke the grace period . It wasn’t recovered through 1:30, so this is a late bias-down environment.
The trek to fresh lows remains intact. Nothing prevents trending under the 2003.00 target. Exiting the bias environment under it could prevent recovering.
Look ahead: Economic Calendar – for Mon Dec 14, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No reports are due Monday, which isn’t much more quite than the week prior to it.
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2031.50 | 2022.00 |
| …would target | 2036.75 | 2027.25 |
| Bias-down: under | 2019.00 | 2009.50 |
| …would target | 2012.50 | 2003.00 |
| Signal status: LATE BIAS-DOWN | 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… Getting a little too comfy down here.
Big gap down stays down.
The pre-open slide to 2012.25 reacted up into and out of the open to 2022.00. Just 3 ticks higher would have signaled the overnight decline was being reversed back up.
Instead, a reaction down ultimately extended to fresh lows at 2011.25. That also reacted up to touch 2022.50. Ranging there lasted too long to be considered as rejecting the decline.
One last gasp up to 2025.50 has been reversed down to 2012.25. Its next lower attraction is to retest the low. But the pattern’s purpose is to resume the overnight decline.
This has been a quite an open. The overnight slide is essentially validated by having delayed its rejection. As I discussed pre-open, Fridays have greater vulnerability to trapping an overnight move. But that window had to be exploited early, or else not at all.
Having dropped so much so quickly, already expending a lot of selling pressure, the slope need not steepen into new lows. But it should behave in a relentless way on the way down to 2009.50 and 2003.00.