S&P
The First Trade… They’ve kept selling.
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…
Greece news triggered Sunday night”s gap down, and extended it through Monday”s open to eventually touch 2062.75. Firming 8 points into late-morning to test the 2071.00 open, and then surged 8 points more to test 2078.25. The balance of the session ranged sideways, supported by 2072.50.
Overnight action”s new info…
Flat-to-lower ranging crept back down to 2072.50 and then ranged narrowly around it. Its break came suddenly one hour before Europe”s opens, which were greeted at 2067.00. The break extended until one hour after Europe”s opens, piercing Monday”s low down to 2062.00. That extra dip was recovered, and and now more so, as 2071.00 is being tested.
If, then…
Sellers didn”t gain traction for yesterday”s efforts, so gapping down today is the only way to resume the decline. Gapping down would be defined by yesterday morning”s last relative low at 2068.00. Holding its support through the open and THEN declining is possible, but likely to be recovered. Meanwhile, holding its support through the open is likelier simply to rally back to yesterday”s 2078.25 highs. Having bounced already from an overnight slide, the bigger question right now is whether the bounce is rejecting that slide, or refueling it for a much deeper decline. Regardless of any unfinished business above, the decline is capable of resuming, aggressively.
First Trade…
Exiting the open at 9:45 above 2071.00 would be unlikely to trigger the 2068.00 bias-down signal at 10:15. Exiting the open under 2065.25 would be likely to trigger bias-down. Exiting the open under 2062.00 would start becoming likelier also to exceed the 2060.75 bias-down target through 10:15 to renew the bias-down signal, next targeting 2052.00.
Monday”s 3:10-3:20 timing window avoided
Monday”s 3:10-3:20 timing window avoided breaking under the bias environment”s 2072.50 low. That was the last opportunity for sellers to gain traction. After firming into the position-squaring window at 3:37, a surge was suddenly attacking the afternoon”s 2078.25 highs. That was the likely alternative to trending down.
Actually, the late surge stopped pessimistically short of probing fresh session highs. That”s not quite “ineffectual pessimism” when its context is a session spent entirely in negative territory. But neither does it reflect bottom-fishing, or refueling sellers — neither is a contrarian matter, but either could have undermined a further recovery if failing to hold up through the close.
No unfinished business below was left outstanding, so gapping down Tuesday would be considered new sponsorship. And trending up overnight would be credible for resuming last Wednesday”s confirmed breakout.
More details were discussed during the post-market Wrap, recorded here:
https://roddavid10.mitel-nhwc.com/join/hthtkhc
Overnight links to view chaRTroom action:
XP-Friendly: http://anymeeting.com/748-955-488
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2088.75 | 2080.00 |
| …would target | 2095.25 | 2086.50 |
| Bias-down: under | 2076.75 | 2068.00 |
| …would target | 2069.50 | 2060.75 |
| 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… Down for the count.
Morning drop”s retracement doesn”t translate to afternoon recovery.
We discussed a setup during this weekend”s Saturday Review, which anticipated recovering into positive territory from an overnight or opening probe into negative territory. The probe occurred, and it was retraced back through the open. But its retracement never extended into positive territory.
Not, yet.
Tomorrow”s session isn”t being greeted from a position of weakness. After extending down 8 points, the 2071.25 opening print was recovered by 8 points, as well. And once it was recovered, it stayed recovered. Also, despite the final hour”s entry overlapping the noon hour”s low, the 3:10-3:20 timing windows did not exploit the weakness. So, sellers didn”t gain traction for their earlier effort.
But buyers didn”t gain traction, either. Extending down Monday night and trending down Tuesday is possible, which is how the decline has developed Friday and Monday. But not gaining traction Monday does require gapping down Tuesday to undermine a recovery. Not gapping down would not likely resume the decline — even if fresh lows were probed intraday.
So, as for that setup we discussed on Saturday, it remains intact since today”s sellers gained no traction. Its delay suggests that Tuesday will gap up to fulfill it. But the vulnerability to a recovery would evaporate by gapping down.
Daily Spot… Euro cares least about Grexit?
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 Jun Contract (EC, ETF: (FXE, UUP))
An eerily narrow range accompanied pessimistic stock market reactions to the weekend”s heightened risk of a Grexit. The bigger picture continues to suggest that at least one more higher close remains outstanding before a sell-off could be credible. Monday only firmed back toward recent highs around 1.1300, but an Ascending Triangle has formed.
Gold Jun Contract (GC, ETF: (GLD))
Sunday night”s fluctuation from positive territory into negative was recovered positive again Monday morning, nearly touching last week”s 1191.70 bounce limit high up to 1190.00. Closing back under 1183.50 would likely launch a new downleg.
Silver Jul Contract (SI, ETF: (SLV))
Gapping up Monday extended higher briefly to probe back into the 16.15-16.35 resistance range, which again rejected price back down through the close, as a recovery is premature.
30-year Treasury Jun Contract (US, ETF: (TLT))
Friday reacted down sharply from only attacking 151-25 resistance to within 3 ticks. Nevertheless, Monday morning pierced 151-25 by 1 tick before reversing down under Friday”s reaction to 150-06. At least a session of backing-and-filling is now likely.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh pullback lows testing 58.75 Sunday night trended back up after Monday”s open, still needing to recover the 60.30 pullback limit that had failed to hold its test as support last week. Closing back above 60.80 would still be credible for launching an upleg.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Friday”s test of 2.74 support had reacted up sharply, only to probe a fresh session low at 2.72 support. Monday”s open gapped up to 2.80 resistance and extended sharply higher intraday to retest last week”s highs. Closing higher again Tuesday would confirm the rally had resumed.