S&P
Wednesday failed to extend two
Wednesday failed to extend two more surges, one of them pre-open, both probing above 2118 resistance. Neither was reversed back into negative territory. In fact, Wednesday”s session was borderline “ineffectual optimism,” gapping up and spending the entire session in positive territory without extending higher.
A door remains open to launching an upleg. It”s the front door, as in Thursday”s open. Trending Thursday afternoon will be difficult if not already underway by then, as Friday morning”s impending Employment Situation report tends to paralyze price action with anxious. The drop since Memorial Day has formed a Descending Triangle, and greeting the report from within the pattern wouldn”t be a position of strength.
NOTE: I”ll be unavailable Thursday after the noon hour. First, we”ll do a “Market Wrap” of sorts at 1:03 ET, and then identify the afternoon”s bias. The chaRTroom will remain on-line.
Here”s Wednesday”s post-market Wrap recording:
https://roddavid10.mitel-nhwc.com/join/zvshzkj
And here are the overnight chaRTroom links:
XP-Friendly: http://anymeeting.com/460-932-788
non-XP ilinc: https://roddavid10.mitel-nhwc.com/join/bfyytsh
Daily Spot… Bond meets target, Gold breaks support
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))
Tuesday afternoon”s dip had held its 1.1095 pullback limit, which Wednesday”s exploited with a second consecutive higher close that confirmed Tuesday”s breakout. Now at least an eventual third higher close is required.
Gold Jun Contract (GC, ETF: (GLD))
Tuesday had not yet broken lower to continue reversing Monday morning”s failed surge, but Wednesday”s gap down and follow-through to 1180.00 compensated for the delay. A second consecutive lower close Thursday would confirm a deeper downleg underway targeting the 1150”s. Closing above 1189.00 would undermine the decline.
Silver Jul Contract (SI, ETF: (SLV))
Wednesday”s open was already gapping down and probing fresh relative lows ahead of the afternoon”s Beige Book release. Lower lows stopped short of probing the 16.15-16.30. target area.
30-year Treasury Jun Contract (US, ETF: (TLT))
New lows Wednesday morning fulfilled the longstanding 149-08 target to within 1 tick before firming into and out of the afternoon”s Beige Book release. Closing above 150-16 would indicate the drop was ending, but not necessarily ready to reverse the trend back up.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
After having probed above 60.80, testing 60.30 was likely to hold through Wednesday”s close. It didn”t. Closing under it suggests that much more substantial selling pressure is forming. But gapping up and/or spiking back through 60.80 Thursday would reject Wednesday”s deeper dip, while targeting 63.00. Closing under 58.75 would invalidate the recovery potential.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Wednesday”s gap down from having closed Tuesday above a multi-session range has left unfinished business above. And the intraday dip held a 61.8% retracement back into the range. Greeting Thursday”s EIA report already in an uptrend would have been a better position of strength. But immediate strength would be credible for extending higher.
Trying, trying again.
Fresh highs retraced to their move”s origin, again.
This morning”s rally to 2120.75 consolidated back down to the 2118.00 bias-up signal as support. Narrow ranging for an hour waited patiently for the bias environment to begin lapsing. And then the selling began.
We knew it was getting late to resume the rally with Beige Book”s release getting closer. But probing under this morning”s 2112.00 bias-up signal does border on overkill.
Despite dropping 10-11 points to test 2111.00 before the noon hour and 2109.00 during the noon hour, negative territory was never threatened. A lot of selling pressure has been expended to reject the post-open rally, but that hasn”t resumed the decline. If an afternoon rally can”t exploit this setup, then the afternoon could be much lower.
Afternoon bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2119.75 | 2118.00 |
| …would target | 2126.50 | 2124.75 |
| Bias-down: under | 2110.00 | 2108.25 |
| …would target | 2104.00 | 2102.25 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open review… Comping for the delay(s)
Pre-open tumble and post-open plunge all recovered.
The pre-open rally to 2119.75 had retraced to the 2112.00 bias-up signal. Bouncing into the open tested the 2114.75 preliminary level, whose recovery through 9:45 would have made the bias-up signal likely to trigger at 10:15.
By the same token, holding the test of 2114.75 would make bias-up unlikely to trigger.
Headlines about Ukraine rebels made 2114.75”s test react down. Hard. The first 5 minutes plunged 8 points to 2107.25. Suffering the consequences so quickly made 2114.75”s test irrelevant. Bias-up still could trigger.
Bias-up did trigger, already testing the 2118.00 bias-up target. It wasn”t exceeded in time to renew the bias-up signal, but reaching it so late didn”t prevent its momentum from extending higher to 2120.75.
Absorbing yesterday morning”s sell-off should have produced this rally yesterday afternoon. Gapping up above yesterday afternoon”s 2116.00 high should have resumed it with a vengeance.
Exiting the bias environment above 2121.25 is the next possible confirmation that a rally targeting new highs is underway. Back under 2112.00 would have have little excuse for not extending down aggressively.