S&P
The First Trade & Pre-open Tour Recording… Hunkering down, a little.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Wednesday’s illiquidity had certainly exacerbated Tuesday’s otherwise valid break under 2763.00. That same illiquidity probably contributed to Wednesday night’s unusual open that saw the first minute plunge 71 points. Its reaction never recovered, and Thursday morning extended down to 2614.00. That was at the morning’s bias environment exit, and the balance of the session trended back up to 2699.00. That took the day’s loss to single digits, but positive territory wasn’t recaptured, and no traction was gained for all that effort. A couple of important levels did hold their tests — room for noise down to 2656.00, and the 2626.00 Thanksgiving prior low. Oversold RSIs were left outstanding at the low.
Overnight action’s new info…
Globex has drifted lower since yesterday’s close, eventually greeting Europe’s opens at 2670.00 “lower prior highs” from earlier yesterday. Its reaction has peaked twice at 2685.00.
If, then… (notes to accompany the Tour recording)
Does the overnight dip’s pessimism supersede the optimism of yesterday’s late surge, ahead of this morning’s Employment Situation report? Actually, neither has gained traction that would offer any predictive value. The bigger question seems to be not how the market will react, but whether trending into the weekend is waiting for the reaction to pass. A knee-jerk reaction down to 2656.00 and/or 2626.00 that holds through the open or through the morning could resume yesterday afternoon’s recovery. Failing to hold their retest could similarly resume Thursday morning’s decline. Friday Factors could exacerbate either setup.
First Trade…
[Click here to view the Bias parameters] No preliminary levels are considered ahead of an Employment Situation report.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2702.25 | 2702.50 |
| …would target | 2710.75 | 2711.00 |
| Bias-down: under | 2680.25 | 2680.25 |
| …would target | 2668.00 | 2668.00 |
| Signal status: noN-BIAS, STILL TESTING BIAS-DOWN SIGNAL, TESTED BIAS-UP SIGNAL | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Is it a bottom? A lot of buying energy was expended from the morning’s bias environment exit through the close, rallying from 2614.00 up to 2700.00. But positive territory wasn’t recaptured, and no traction was gained for the effort.
A couple of important levels did hold their tests — 2626.00 and 2656.00. One or both could be retested naturally to form a more durable bottom. But a credible bottom shouldn’t require any more development than a brief dip. Not recovering from early weakness could find Friday Factors exacerbating selling pressures similar to Tuesday.
Whether or not Friday is another day that lives in infamy, this week will. Getting the Employment Situation report out of the way should free the market to trend in the direction of its next leg.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Mid-day Update… Optimism is its own worst enemy.
Noon hour bounce hasn’t gained traction.
The open’s decline extended through the morning’s bias environment. Lapsing at 11:30 was greeted by 2 detached bars probing under the 2626.00 objective down to 2614.00, accompanied by oversold RSIs.
A good opportunity to form a bottom. But it produced a bounce.
Not just a bounce, but almost a complete retracement to within 5 ticks of the 2669.50 open’s high. So, only noise — 54 points of noise — without having hesitated at the low to reflect any accumulation.
Now the afternoon’s bias-up parameters have been tested, and rejected after invoking the grace period. This is a no-bias environment, reflecting a lot of buying pressure having been expended without gaining traction for the noon hour’s effort.
Rejecting tests of both bias-up parameters in the morning would put into play offsetting tests of both bias-down parameters. Not in the afternoon. The 2633.50 bias-down signal doesn’t require a test, but its test would likely define the window’s low. Breaking any lower — or higher — would be more credible after the bias window begins lapsing at 2:30.
Look ahead: Economic Calendar – for Fri Dec 7, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Employment Situation report is often the session’s only high-profile and reliably influential item. But not this month, with at least one of the post-open items typically inhibiting or triggering a reaction.
*Employment Situation
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
Wholesale Trade
10:00 AM ET
*Lael Brainard Speaks
12:15 PM ET
Baker-Hughes Rig Count
1:00 PM ET
Consumer Credit
3:00 PM ET