S&P
Post-market Wrap (recording & summary)
Wednesday’s two shallow pullbacks at the open and during the noon hour reflected excessive optimism. Their interim rally had triggered bias-up and fulfilled it, but extended higher anyway. It doesn’t get much more optimistic than that.
Maybe a little bit more optimistic. A 6-point surge into the FOMC news touched a fresh high at 2079.00. Suddenly all of that optimism was sorely missed, just when it was needed most. Price plunged easily to fresh session lows at 2055.50. One brief, deep correction doesn’t offset excessive optimism, but it helps. And the balance of the session rallied to new highs at 2085.25.
Last Thursday’s confirmed breakout required an eventual third higher close. That’s now done. The rally’s next higher objective after closing above 2055.00 was 2088.00. That’s not done. But now testing 2088.00 intraday can reverse down durably intraday, without leaving unfinished business above.
There’s no requirement for 2088.00 to be touched, or for its touch to reverse down immediately, if at all. But there is no other “unfinished business above” in-play. It is being attacked by excessive optimism. And a lot of energy was just expended intraday in order to absorb a lot of selling pressure. The rally’s sponsorship is weak-handed and vulnerable.
Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/rkbtpxj
This evening, monitor overnight Globex trading in the chaRTroom at:
non-xp ilinc
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2090.75 | 2084.50 |
| …would target | 2095.75 | 2089.50 |
| Bias-down: under | 2083.50 | 2077.25 |
| …would target | 2077.00 | 2070.75 |
| Signal status: NO-BIAS, BOTH BIAS SIGNALS TOUCHED | 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.
Pre-close View… The price of delay.
Shallow corrections rack up a bill.
The post-open reaction down from testing 2066.00 had recovered to trigger the bias-up signal triggered. After also extending through its bias-up target, the noon hour’s shallow correction confirmed the session had become overly optimistic.
Surging6 points to 2079.00 was broadsided easily by the FOMC news. Its reaction plunged to fresh session lows at 2055.50.
Recovering since then has climbed as high as 2075.50. There’s no requirement to resume the rally today. So long as the eventual third higher close required by Thursday’s confirmed breakout is fulfilled today, the rally’s next higher objective at 2088.00 is likely in-play.
Daily Spot… Stirring the pot.
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 Sep Contract (EC, ETF: (FXE, UUP))
Gapping up Wednesday probed above Tuesday’s high to more fully utilize the room for a bounce up to 1.1100. Having fully utilized it, I noted during the morning Tour that a reaction down had become likely and likely at least to fulfill the minimum third lower close in-play. The FOMC reaction actually plunged to new lows at 1.0933.
Gold Dec Contract (GC, ETF: (GLD))
Gapping up Wednesday through the 1170.00 buy signal extended through 1173.50 and also above 1180.00. The reaction before FOMC had attacked 1173.50. The reaction after plunged down to 1162.00, leaving no new signal.
Silver Dec Contract (SI, ETF: (SLV))
Basing around 15.85 lifted off overnight to trend up Wednesday and test 16.35. But the FOMC reaction erased it all back down to 15.85.
30-year Treasury Dec Contract (US, ETF: (TLT))
Tuesday’s retest of the bounce limit of last Monday’s 158-10 / 158-24 highs produced another reaction down Wednesday to 157-08. Firming in reaction to FOMC held above 157-02 to delay extending the decline.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s gap down had already indicated wider realization of the downtrend we’ve been tracking. But Wednesday’s surge developed prematurely to the likelier bounce origin that wasn’t yet reached. The bounce was nonetheless productive, testing 46.00. Back under 44.05-44.25 would signal the bounce had ended and that momentum was reversing down to at least 41.50-42.20.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
More ranging around 2.05-2.08 Wednesday continued forming a base that can launch a recovery leg if triggered back above 2.25.
Mid-day Update… Positive attitude.
Still probing higher ahead of FOMC.
This morning’s 2071.50 bias-up signal was met and exceeded up to 2074.75. Consolidating into the noon hour’s exit suddenly spiked up to a fresh high, which has been pierced up to 2076.00.
Meanwhile, RSIs have begun diverging negatively. So, avoiding a corrective dip all but requires extending the rally aggressively.
That upside path is being challenged by the impending FOMC effect that makes attracting new sponsorship difficult. A corrective dip down to 2065.25-2067.50 could help to ensure a favorable reaction back up. Otherwise, extending higher at all could stumble and reverse down at its first hesitation.