S&P
Thursday”s late dip probed fresh
Thursday”s late dip probed fresh session lows. That left only one timing window not to probe its prior timing window”s low. And that qualifies Thursday as a “session-long decline.” Session-longs tend to extend through the following morning. That”s in-line with Wednesday morning”s signal for trending down through Friday morning.
Being a more recent signal and independent of Wednesday”s signal, NOT probing lower Friday morning would require significant bullish sponsorship. Not just an overnight rally or an opening bounce — either of these can resolve down to fresh lows — but actually triggering bias-up would be credible for extending higher. A lot higher.
Absent such meaningful strength, the question for Friday morning is how deep? There”s a lot of calculable support and a gap just 4 points lower at 2089. There”s a bigger attraction at 2084 down to 2082.50. Whichever, greeting the afternoon without yet rallying could extend the drop much more steeply into the close.
Here”s more detail in the post-market Wrap:
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Morning bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2105.00 | 2096.75 |
| …would target | 2113.75 | 2105.50 |
| Bias-down: under | 2099.50 | 2091.25 |
| …would target | 2094.75 | 2086.50 |
| Signal status: LATE BIAS-UP, TESTED 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.
Pre-close view… Laid back sellers.
Creeping lower, but barely trending.
The 2101.50 bias-down signal was still being overlapped both at 1:20 and at 1:30 to avoid triggering. The noN-bias environment didn”t require fulfilling the 2096.00 bias-down target. But it was tested anyway, on the way to 2092.50. Now a 6-point bounce is trying to hold above 2096.00.
It”s negative territory, but not by very much. And sellers aren”t gaining traction for today”s efforts — the bias environment exit was under the noon hour”s low, but the final hour”s entry wasn”t under the bias environment”s low, and the 3:10-3:20 timing window didn”t trend down, either.
So far, it seems that trending down through Friday morning is being attacked with the least necessary effort.
Let”s see what the position squaring window does before drawing a conclusion. It”s opening now at 3:37. The session”s final timing window — last 60-90 minutes — has yet to probe under a prior timing window”s low. It will, if this is a session-long decline session. And it will be vulnerable to ticking down into the close.
Closing above 2099.25 would be the only bullish development possible today, and the trend otherwise remains down.
Daily Spot… Naturally gassed up.
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))
The 1.1250-1.1275 bounce limit was shallow, but overnight firming was shallower. Thursday”s intraday high was even shallower. That”s pessimism and it suggests that a bigger bounce may be necessary before a deeper drop can begin. Dropping before another bounce should be short-lived.
Gold Aug Contract (GC, ETF: (GLD))
Very narrow ranging Thursday avoided rejecting Wednesday”s close under its prior low. Fresh lows remain likely, targeting 1158.50.
Silver Jul Contract (SI, ETF: (SLV))
Very narrow ranging continued to undermine the momentum of Tuesday”s break lower, while not reversing it. A fresh low is possible, but not yet likely to extend.
30-year Treasury Sep Contract (US, ETF: (TLT))
Closing above Monday”s 149-24 close Wednesday only suggested that sellers were done, but closing above 150-08 is still needed to signal momentum has reversed back up. Thursday”s choppy inside day can”t afford to delay rallying early morning, or else fresh lows become likely.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down a little and ranging narrowly Thursday didn”t reject Wednesday”s close back under 60.70 support. The pattern isn”t distributive, so I don”t have a sell trigger, but probing fresh lows is likely if Friday”s open isn”t almost immediately rejecting and recovering the two-day dip.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Gapping up Thursday extended to 2.83 ahead of the EIA report. Its reaction down attacked 2.77 to within 1 cent before reversing back up to fresh session highs testing 2.85. Pullbacks must hold 2.83 to maintain the rally”s momentum, which still needs a second consecutive higher close Friday to confirm.
The case for crashing… or at least sliding relentlessly.
It”s also a case for simply weakening.
This morning”s open gapped up to and through yesterday afternoon”s 2105.50 high. After having trended down into yesterday”s close, this rejection begins forming a “session-long rally” setup. The setup is completed by maintaining the gap up.
Today”s gap up wasn”t maintained. This is not a session-long rally. But there is a consequence to forming all but the final element to a setup. Often, however bullish or bearish the completed setup might be, the incomplete setup is the opposite.
Has today”s setup inverted to a session-long decline? Only one of today”s three timing windows so far has failed to probe a prior low. Every remaining timing window must now probe a lower low to track the session-long decline template.
Facilitating that is several attractions below that don”t point sharply lower, so much as they simply point lower for awhile:
– Required retest of oversold RSIs at this morning”s 2098.25 low.
– This afternoon”s 2101.50 bias-down signal would target 2096.00.
– Yesterday morning”s signal for trending down through Friday morning.
Not triggering this afternoon”s 2101.50 bias-down signal — being tested now — wouldn”t necessarily be bullish. That no-bias could simply delay extending down further until late afternoon. Nothing requires down steeply, but this wouldn”t be a bullish environment to try absorbing more negative headlines.