S&P
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2085.25 | 2077.00 |
| …would target | 2091.75 | 2083.50 |
| Bias-down: under | 2076.25 | 2068.00 |
| …would target | 2070.75 | 2062.50 |
| Signal status: waiting for trigger | 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… Is it safe, yet?
Fresh highs threatening to gain traction.
The afternoon”s 2059.25 bias-up target was met and not exceeded by 1:20, so the bias-up signal wasn”t renewed. The bias environment hovered narrowly around 2059.25, until a late dip that touched the 2053.75 bias-up signal as support.
Its reaction up rallied 19 points to 2073.00. The final hour was entered well above the bias environment”s high. That would have been bullish for tomorrow if the bias environment had been exited above the noon hour”s high. Nevertheless, it could be bullish if the 3:10-3:20 window were to extend to fresh highs.
Not confirming the final hour”s entry wouldn”t default to bearish. And it wouldn”t prevent extending higher today after 3:20. Its absence would leave the door open to yet another intraday dip. Intraday dips are vulnerable to probing new lows, and there”s no bullish reason for another fresh low.
Meanwhile, quarterly earnings news will take on a higher profile, helping to drown out the noise of Greece thrashing about on the hull of the market”s deep sea fishing boat. That might actually help to insert a rally.
Daily Spot… Carnage.
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))
Having held the 1.1120 bounce limit after Monday”s bounce originated optimistically short of actually touching the prior Sunday”s low, lower lows Tuesday filled the month-old gap at 1.0930. The drop”s momentum remains intact so long as bounces now hold 1.1000 as resistance.
Gold Aug Contract (GC, ETF: (GLD))
Tuesday”s plunge fulfilled the retest of 1158.50 down to 1146.80. Consolidating under 1158.50 qualified as a breakout. A second consecutive lower close Wednesday would confirm at least a third eventual lower close coming. Closing above 1163.00 would signal that a bottom is forming, if not already reversing up.
Silver Sep Contract (SI, ETF: (SLV))
Spiking down more than $1 Tuesday to 14.62 doesn”t seem to qualify as “slow-playing” its decline. But this is the stage where a bottom can form by re-syncing with Gold. Avoiding a second consecutive lower confirming close Wednesday would be the first step.
30-year Treasury Sep Contract (US, ETF: (TLT))
The quality of last week”s bottom hasn”t improved simply because of the rally that it launched. Extending higher even during Monday night”s stock index rally suggests that more than a flight-to-safety is driving price higher. A second consecutive higher close Tuesday confirms Monday”s breakout and requires an eventual third higher close. That said, Tuesday”s price action formed a potential Island that would be triggered by gapping open Wednesday back under 151-28 and leaving the eventual recovery for another week.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending down deeper through Tuesday morning tested relevant support at 50.40-50.55. The next relevant support had been 51.90-52.05, which a reaction up was overlapping. This should be the low of what is only a correction, so long as a bounce recovers 52.90-53.00. Otherwise, extending down would next target new lows at 48.25.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Monday”s break back to 2.77 extended lower overnight somewhat similarly to Friday”s temporary probe above 2.83. Fresh lows intraday under 2.69 were retraced enough that also recovering 2.77 Wednesday could form a durable bottom. There is otherwise no compelling pattern currently.
Pause that refreshes can also kill.
Big intraday rally is still only tentative.
Failing to hold the 2050.25 bias-down target through 10:15 essentially had put into play a test of 2040.25. It was probed down to 2035.00. But that was between the morning”s bias environment exit and the noon hour”s entry, both of which were above 2040.25.
So, 2040.25 qualified for having been met, and held. And it was produced by a Symmetrical Triangle, a pattern that tends initially to break falsely in one direction before reversing more substantially in the opposite direction. Was that the false break?
It seems so. The reaction up never pulled back to fulfill my retracement criteria before exceeding my 2044.50 buy signal. That has extended to attack 2061.00. But this afternoon”s 2059.25 bias-up target was still being overlapped at 1:20 to avoid renewing the bias-up signal.
So, this afternoon”s bias environment has ranged narrowly sideways around the 2059.25 bias-up target. Being a bias-up environment, the rally may extend any time it pleases. Being the bias environment will soon start lapsing, it had better extend higher soon.
My concern is that this upleg is a “noon hour counter-trend,” which bisects the afternoon”s resumption of the morning”s trend. I haven”t seen one in quite awhile, but it would target fresh session lows. And several elements of the rally are keeping it vulnerable to ending.
Probing fresh highs above 2063.00 — and extending higher, not just retesting the high”s overbought RSIs — would help to alleviate my concern about resuming the decline today. Meanwhile, back under 2053.25 would start signaling at least a dip underway, if not new lows.
Look ahead: Economic Calendar – for Wed Jul 8 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Wednesday afternoon”s FOMC Minutes should be very influential as the timing of a mythical rate hike takes on greater importance.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
*John Williams Speaks
2:00 PM ET
**FOMC Minutes
2:00 PM ET