S&P
The First Trade… Pre-expiration headlock.
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…
Thursday”s 2113.50 open had gapped up 9-12 points from Wednesday”s closes, above all of the week-long upleg”s prior intraday highs. The session extended higher through the close to touch 2118.50. Buyers barely avoided gaining traction for their efforts.
Overnight action”s new info…
Narrow, sideways ranging has been twice touched Thursday morning”s 2115.00 high while attacking its 2118.50 afternoon high to within 1 tick. The highs are being attacked again, now.
If, then…
This being expiration and, of course, a Friday, several signals and setups are working. The bullish WedEX is their main filter. Its inversion to bearish would start becoming likely if the opening 15 minutes of volatility were to trend down, and/or if the open were to gap under yesterday afternoon”s 2113.00 low. Otherwise, the the afternoon”s bullish WedEX influence remains likely, even if this morning”s bias-down were the only bearish setup triggered. Meanwhile, let the the narrow overnight range lull you into complacency — expiration”s open can begin trending from a standing stop.
First Trade…
Exiting the open at 9:45 above 2121.75 would be likely also to trigger the 2119.75 bias-up signal at 10:15. Exiting the open under 2111.75 would be likely to trigger the 2112.75 bias-down.
Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2126.50 | 2119.75 |
| …would target | 2134.00 | 2127.25 |
| Bias-down: under | 2119.50 | 2112.75 |
| …would target | 2112.25 | 2105.50 |
| Signal status: LATE NO-BIAS, BIAS-DOWN SIGNAL | 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.
Thursday”s gap up trended up
Thursday”s gap up trended up into the close, touching fresh highs at 2118.50. The rally barely avoided gaining traction for its effort — avoided it by just enough not to rely on trending up Friday morning, and to take seriously a gap down under the afternoon”s 2113 low.
Gapping down under 2113 would also form a session-long decline. And being expiration, trending down through the entire opening 15 minutes of volatility would foreshadow trending down throughout the day. Either or both of these conditions would undermine the bullish WedEX that expects an upward bias Friday afternoon.
So, initially attempting to form either bearish setup would be expected to fail. Similarly, forming either bearish setup would invert the bullish WedEX. And remember the bigger picture pattern targeting new highs? Don”t get me started…
Actually, we discussed all of that in detail during the post-market Wrap, along with other markets coverage, recorded here:
https://roddavid10.mitel-nhwc.com/join/shwpzxy
Overnight chaRTroom links are below:
XP-Friendly: https://www.anymeeting.com/656-913-831
xp UN-friendly: https://roddavid10.mitel-nhwc.com/join/shkphyy
Pre-close view… Not backing down.
Bias environment exit is probing fresh highs.
This afternoon”s no-bias environment was essentially a no-volatility environment, too, barely piercing above the 2113.00-2115.00 2-point range.
A 2-point spike up coincided at 2:30 when the bias environment began lapsing. That has eked out slightly higher and higher highs up to 2117.25, but its reactions down continue overlapping the noon hour”s 2116.00-2116.50 highs.
That”s the definition of flat-to-higher. And it threatens to fulfill the third higher close required by Monday”s confirmed breakout.
So, closing positive today would open the door to a flat-to-lower morning tomorrow. Nothing too dramatic, as the window for a correction essentially closed Thursday morning. And the door remains open to simply extending the rally Friday morning, instead of waiting for the afternoon”s bullish WedEX influence.
There”s always a path down. Friday”s path down would invert the bullish WedEX. It would also likely begin by gapping down under Thursday afternoon”s 2113.00 low, and probably also trend down through the opening 15 minutes. Regardless, the ultimate objective remains new highs.
Daily Spot… Bigger bond bounce, while Gold gels.
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))
Stopping optimistically short of touching prior lows Wednesday revealed weak-handed buying pressure, which Thursday”s gap down testing 1.0865 proved. Bouncing back to the decline”s 1.0935 target as resistance, the opening gap reflects lower lows yet to come.
Gold Aug Contract (GC, ETF: (GLD))
Gapping down Thursday to Wednesday”s lows and no lower reflects weak-handed selling pressure. It”s not necessarily a bottom, and won”t necessarily avoid touching 1138.00. But probing above 1151.00 would be credible for extending higher without leaving unfinished business below.
Silver Sep Contract (SI, ETF: (SLV))
Gapping down Thursday was reversed briefly into positive territory before spending the afternoon ranging narrowly around unchanged. Probing above Thursday”s 15.15 intraday high would be likely to extend in that direction.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday”s tenuous close above 150-24 was retraced to test the 150-08 pullback limit down to 150-00 Thursday morning. It held, and rallying through the noon hour to fresh highs at 151-20. A second consecutive higher close would confirm Wednesday”s breakout, regardless of any unfinished business below being left outstanding.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday”s probing under 51.00 may be exploiting the continued delay in rallying that has made fresh lows targeting 48.00 increasingly likely.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
The reaction to Thursday”s EIA report was negligible. This, despite the pattern”s excuse for reversing down since Wednesday”s inside day had neutralized the attraction back up to Tuesday”s 2.91 opening gap up. The 2.83 pullback limit was attacked, and its break would still target at least 2.77. But any new strength through 2.91 would be credible for extending higher intraday.