S&P
The First Trade… Raining AND pouring.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Sunday night”s plunge to 1960.00 did a relatively small portion of what Friday had been vulnerable to throughout the day. Monday”s session was vulnerable to extending down further, but only attacked the overnight low. At least the entire session was spent in negative territory, and its sellers gained traction for their efforts.
Overnight action”s new info…
Empathizing with China crashing again helped to deliver the rest of what Friday had been vulnerable to — by dropping 31 points to test 1931.00. Consolidating there has broken lower to 1919.50, where a bounce is probing back above 1931.00.
If, then…
We discussed during yesterday”s post-market Wrap that seasonal bullishness surrounding Labor Day weekend all but required resuming the decline without delay, or else it would be delayed until next week. As powerful as the overnight plunge is, there is still a small window to reverse momentum back up. Just gapping down to 1938.00 would form a sort of Island from Thu-Mon price action. Not the sort of Island that requires being retested, but which resumes the prevailing trend. Room for noise under 1938.00 down to 1934.00 must both maintain their breaks through today”s open to maintain the overnight plunge”s momentum. Otherwise, momentum can be pointed back upward for the balance of the morning.
First Trade…
The market is far below this morning”s bias parameters.
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1978.25 | 1975.00 |
| …would target | 1984.00 | 1980.75 |
| Bias-down: under | 1965.25 | 1962.00 |
| …would target | 1957.25 | 1954.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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.
Monday afternoon”s sellers gained traction
Monday afternoon”s sellers gained traction for their effort — the bias environment was exited at 2:30 under the noon hour”s low, and the final hour was entered under the bias environment”s low. Of course, that was the case at Thursday”s low, which immediately reversed back up to retrace all of a 42-point plunge. But the recovery didn”t extend any Friday, and if the setup is still influential, then Tuesday won”t rally, either.
That can be invalidated Tuesday”s open by immediately recovering Monday”s 1979 bias environment high, and maintaining it. That”s more than 11 points, not especially difficult in this environment. Which would be that much more bearish not to reject Monday afternoon”s sellers at Tuesday”s open.
Rejecting the downside would likely resume the corrective bounce, next targeting 1996-2000. Extending Monday”s decline would target 1953.50, and then 1944, and then much, much lower. Details and other markets coverage are discussed in the post-market Tour recording linked here:
https://roddavid10.mitel-nhwc.com/join/shwtphh
After 6:30 ET, use one of the following links to monitor the overnight Globex action:
Win XP-Friendly — http://anymeeting.com/831-529-426
non-xp friendly — https://roddavid10.mitel-nhwc.com/join/bfyytsh
Daily Spot… Crude, so close and yet so far.
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))
Narrow ranging Monday continued to hold the maximum pullback limit that at least allows an accumulative pattern to form. But the behaving like an inside day does essentially require the rally to resume without much further delay if a deeper drop will be avoided.
Gold Dec Contract (GC, ETF: (GLD))
Monday”s initial weakness still held the 1125.70 pullback limit. The gap back to Friday”s 1133.00 close was filled but not recovered, so resuming the rally Tuesday all but requires launching earlier.
Silver Dec Contract (SI, ETF: (SLV))
Thursday and Friday”s test of the 14.55 bounce limit held, still needing to fill the gap back down to last Wednesday”s 14.35 opening gap before a recovery would be credible for extending higher.
30-year Treasury DecContract (US, ETF: (TLT))
Monday”s early probe above 155-24 was the buy signal”s third attempt to trigger. It wasn”t the most substantial attempt, but its rejection was the most substantial reaction down, attacking last week”s 154-00 low. The decline is on the precipice of resuming if a rally isn”t underway through Tuesday”s close.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Coming to within 20 cents of my 37.55 target and then hovering sideways for the next session still does not qualify as accumulation. So, the three-day surge from there isn”t any more durable just because it has recovered $11, but that”s still difficult momentum to retrace. And now it has potential to test 50.10 before a substantial reaction down might form.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Gapping down Sunday night and extending lower tested last week”s lows around 2.65 without closing lower. That could qualify as the basis for a durable bottom, leaving no unfinished business below if a rally were to begin Tuesday.
More to come?
Resuming this morning”s drop would target well under the overnight low.
This morning”s bias-down environment probed above the bias-down signal to 1976.25. After reacting down 10 points, and when the bias environment had become less influential, fresh highs were probed up to 1983.75. That was retraced before the noon, likely to trap buyers.
If it”s a trap, then it”s slow to snap. This afternoon”s 1973.75 bias-down signal didn”t trigger. Probing under it after 1:30 was too late to invalidate the no-bias that had signaled already. So, price is still hovering around 1973.75, probing 2 points either way around it.
The bias environment comes within view of lapsing at 2:15-2:20. Breaking under 1973.75 would be entirely credible for launching a new downleg — not just targeting fresh session lows, but a probe under the overnight lows as 1944.00”s attraction become threatening again. Otherwise, back above 1979.25-1980.75 could trigger a rally into Wednesday morning.