S&P
Pre-close view… the opposite of up IS down.
Short-squeeze avoided, capitulation warning.
Here”s today”s chaRTroom links again
o Win XP-Friendly entry
o non-xp friendly (ilinc)
Exiting the bias environment back above the noon hour”s 2105.55 high would have made a short-squeeze likely through the close. And a short-squeeze at this stage of this pattern would be substantial, targeting 2114.25 as a correction, if not also fresh session highs as a reversal.
But the bias environment”s fresh low at 2096.50 are nearer than its 2103.00 high — 5 ticks lower vs. 5 points higher. And the bias environment has begun lapsing already, from under the noon hour”s low. Entering the final hour lower could melt down into the close.
Note that there is no requirement to trend down, simply as an alternative to bouncing. Firming back into the range isn”t very likely, but it”s possible. Anyway, the alternative to bouncing is still much likelier to steepen the slide.
Daily Spot… Bond detour only as a flight-to-safety?
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))
Closing Friday under 1.1095 had triggered an even bigger distributive pattern. Extending down through the weekend and Tuesday morning is already fulfilling much of the 1.0750 target, having tested 1.0870. The decline remains intact so long as 1.0915 now holds as resistance.
Gold Jun Contract (GC, ETF: (GLD))
Chipping away at 1205.50-1208.00 support meanwhile held tests of 1213.00 resistance to avoid reversing momentum back up. Sliding sharply Monday night tested the next lower support at 1286.00. New lows at 1150.00-1154.00 are likely in-play.
Silver Jul Contract (SI, ETF: (SLV))
Having failed last week”s attempt to recover 16.24-16.35 resistance, resuming the decline Tuesday compensated for the delay. Testing lower prior highs down to 16.65 Tuesday should extend down into the 16.45 area, too, or lower.
30-year Treasury Jun Contract (US, ETF: (TLT))
The bounce to 154-04/154-16 resistance wasn”t extended before Tuesday”s open, but neither was it rejected. That was exploited Tuesday morning during a broad stock market sell-off, and instead extended the rally back up to 156-10. Back under 154-30 would resume the decline.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night”s dive from testing 59.75 had been retraced Monday, but never reversed. Monday”s night”s dip back down to the low had little chance to recover since a sell signal was already in-play. The drop extended down to test 57.70. Although unneeded at this stage, a lower close Wednesday would help to confirm the trend remains down, and likely targeting 55.00.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
[Rolling coverage forward to Jul, which is at a 3-cent premium over Jun] The next lower objective for a pullback was already met during Monday”s Globex at 2.85-2.87. But Tuesday”s open gapped down below it and probed lower. A bounce has room up to 2.90 before signaling that momentum is reversing up.
Look ahead: Economic Calendar – for Wed May 27 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Tuesday”s overload of econ reports caught up with the three-day weekend. Wednesday”s is remarkably unremarkable. Mortgage apps and Redbook have no track record for influencing price action. The noon hour”s 5-year auction will have a higher-profile, and that can make it dangerous.
Jeffrey Lacker Speaks
TUE 7:10 PM ET
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
2-Yr FRN Note Auction
1:00 PM ET
5-Yr Note Auction
1:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2109.00 | 2106.50 |
| …would target | 2114.25 | 2112.00 |
| Bias-down: under | 2103.75 | 2101.50 |
| …would target | 2098.00 | 2095.50 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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.
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Round two, or rewind some of round one?
Next lower objective met, and — so far — held.
The ongoing series of lower lows and lower highs never violated a bounce limit since the open triggered the 2115.75 sell signal. Tested bounce limits, but never higher than the first 3 minutes. And RSI positive divergences have resolved down.
That may be changing now, now that the 2099.75-2100.50 target area has been met. Now that the target area”s test is being accompanied by RSIs diverging positively. And now that a timing window is in-play.
The actual low at 2100.25 printed within 10-15 minutes of the bias environment lapsing at 11:30. Price and technicals can now represent one sponsorship waning, and a new sponsorship arriving.
My 2103.00 buy signal is being probed now, up to 2106.75. There”s enough time to enter the noon hour above the entire 2106.50-2110.00 range, which would seal a bottom — but that”s still difficult with 1-minute RSI already overbought.