S&P
Daily Spot… Euro and Bonds compensate for their delays.
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))
Monday”s had dip held a 61.8% retracement of the rally from last week”s low. Tuesday”s open surged through the likely 1.1095 target on the way to almost 1.1200. Extending the rally depends upon pullbacks holding 1.1110 as support. The next higher target would be 1.2975 1.1295. Otherwise, a much deeper decline is underway.
Gold Jun Contract (GC, ETF: (GLD))
Monday”s stunning intraday retracement of the morning”s surge had not extended under Friday”s close by noon. Instead, flat-to-higher ranging remained within Monday”s range, now falling behind schedule in launching a new downleg.
Silver Jul Contract (SI, ETF: (SLV))
Completely retracing Monday”s opening surge had created a time frame for extending down, if the pattern remained likely to extend down.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday”s steep, deep 2-point drop from 155-5 extended down Tuesday as steeply and as deeply to test 151-14..A bounce should hold 152-24 before resuming the decline.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday”s probing above 60.80 made any dip unlikely to close under 60.30. The probe extended higher to attack 61.80. Now holding above 51.75 59.75 keeps the 63.00 target in-play.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Tuesday”s fresh lows down to 2.60 fulfilled the bottoming setup I had described after Monday”s close. Probing Sunday night”s low and recovering back into Friday”s range above 2.63 –optimally also probing above Monday”s 2.67 high — should marginalize sellers. Closing under 2.60 would be that much more bearish.
Glass half-full.
Noon hour surge has an opportunity… and a risk.
The bias-down environment”s probes above its 2106.50 bias-down signal never extended higher than their first 3 minutes. Their reactions down held the 2104.25 sell signal that would have resumed the decline. The bias environment lapsed at or under 2106.50, leaving no unfinished business below.
Firming into the noon hour then surged to 2114.00. Any fresh high would target 2115.00, which happens to be this afternoon”s bias-up target, i.e. resistance. Its test would be vulnerable to reversing down sharply. But exceeding it through 1:20 would renew the bias-up signal.
Renewing the bias-up signal would be entirely appropriate. Absorbing this morning”s sellers was likely to launch an obvious rally leg. The noon hour”s singular probe into positive territory hardly suffices. Not triggering this afternoon”s 2110.00 bias-up signal at 1:20 could be the last opportunity for avoiding new highs.
Look ahead: Economic Calendar – for Wed Jun 3 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Look at all of those asterisks*. That”s a lot of influential items, and a lot of doubly-influential items. ADP is reliable for triggering a reaction, and it allows us to fine-tune sentiment expectations leading into Friday”s payrolls report. The two afternoon FOMC speakers follow the Beige Book release, so late-morning to afternoon price action might be subdued.
(* “Asterisk” refers to a star-shaped character which directs the reader to search lower in the document for clarification or elaboration)
MBA Mortgage Applications
7:00 AM ET
**ADP Employment Report
8:15 AM ET
International Trade
8:30 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
PMI Services Index
9:45 AM ET
*ISM Non-Mfg Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
**Beige Book
2:00 PM ET
*Charles Evans Speaks
2:15 PM ET
*James Bullard Speaks
4:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2112.00 | 2110.00 |
| …would target | 2117.00 | 2115.00 |
| Bias-down: under | 2103.50 | 2101.50 |
| …would target | 2098.00 | 2096.00 |
| Signal status: waiting for trigger | 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… So, you’re saying there’s a chance.
Bias-down parameters almost rejected. Which means, not.
The 2104.25 open soon resolved down to probe a couple of times under 2097.00. The probes stopped optimistically short of touching last week”s 2096.00 low — which is potentially bearish from a contrarian perspective.
We can dismiss those impatient buyers, since the overnight low had probed much deeper. And not exceeding the bias–down target through 10:15 avoided renewing the bias-down signal.
It”s not an optimal low. But that didn”t prevent a buy signal at 2101.50 from extending to 2106.50. Of course, 2106.50 is this morning”s bias-down signal, and it wasn”t recovered through 10:15 or 10:30.
So, this is a bias-down environment. That hasn”t prevented extending higher to 2108.75. But it is a “bias-down rally,” which must be retraced to at least 2106.50 when the bias environment begins lapsing.*
(*A dip is retracing now to 2106.50, but this is too early to complete its retracement.)
Back under 2104.25 would start to signal the recovery potential was done. Bottoming optimistically short of touching last week”s low, and rallying impatiently — not to mention bias-down rallying — all would combine to make the decline likely to extend. Otherwise, successfully navigating the bias environment”s exit still has that narrow window to become a new rally leg to new highs.