S&P
Daily Spot… Euro reaches a decision point.
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 Mar Contract (EC, ETF: (FXE, UUP))
The rally extended to its target, nearly touching 1.1000. Back under 1.0950 would start to signal the bounce”s momentum was reversing down. Closing above 1.1020 would signal the bounce was not only a bounce, but potentially the start of a much larger rally.
Gold Jun Contract (GC, ETF: (GLD))
Aided by news of direct US-Iran conflict, a pullback to 1194.50 was avoided by surging higher to test 1213.00. Back under 1208.50 would signal the pullback underway.
Silver May Contract (SI, ETF: (SLV))
Early strength Tuesday surged to the upper-end of the 16.45-16.60 resistance band whose lower-end had held Monday. Now a pullback could be limited to testing the lower-end of the band, but any lower would still target 16.10.
30-year Treasury Jun Contract (US, ETF: (TLT))
No overnight improvement above the 61.8% resistance that was tested intraday found Tuesday”s open dipping back down to 162-00 support, and through it at least 4 points to trigger its sell signal, which attacked 161-08 intraday.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Narrow ranging between 56.60-57.70 (which I under-reported here by $1 each yesterday) persisted through Tuesday. And this was in spite of news of a direct confrontation between US and Iran. Breakout potential above 57.70 is getting less likely.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Firming above 2.51 doesn”t offset the preference for retesting the 2.48 opening gap before trying to launch a durable recovery leg.
Look ahead: Economic Calendar – for Wed Apr 29 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
GDP is high-profile, but doesn”t influence price action. Pending home sales might usually, but the afternoon”s FOMC policy statement will be the week”s most influential item. Wording will be dissected for any increased likelihood for hiking rates sooner rather than later.
MBA Mortgage Applications
7:00 AM ET
GDP
8:30 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
7-Yr Note Auction
1:00 PM ET
**FOMC Meeting Announcement
2:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2115.25 | 2109.00 |
| …would target | 2120.50 | 2114.50 |
| Bias-down: under | 2104.25 | 2098.25 |
| …would target | 2099.75 | 2093.50 |
| Signal status: BIAS-UP INVALIDATED | 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… Why this round-trip was HUGE.
Warning shot across the bow.
The pre-open bounce was likely to fail so long as 2104.25-2105.00 wasn”t recovered. Just touching 2104.25 was enough for a reaction down to 2099.00. Its 4-point reaction up failed to turn positive, which was enough for a 15-point plunge to 2088.25.
That was the room for noise under the 2090.00 renewed bias-down target, which was being recovered at 10:15. That”s not necessarily predictive, but it hasn”t prevented extending higher. And higher.
At this moment, a fresh high is probing 2104.25-2105.00. The bias environment lapsing at 11:30 is now within 10-15 minutes. Two bias-down targets and the bias-down signal may have been rejected going into the noon hour. Perhaps it is a little more pronounced, but nonetheless exactly the bullish setup I described this morning: holding the 2090.00-2095.25 band of support through relevant timing windows.
If maintained, the market could be significantly higher this afternoon. By the same token, somehow not maintaining the rejection would then point much, much lower. Oversold RSIs are outstanding at the low.
Important note: Erroneous news of direct conflict between US and Iran may have triggered the extended drop. The news has since been retracted — or, at least, corrected. Regardless, we now have a new category of news for which reactions to its coming headlines can present buying opportunities. Like the Ukraine-Russia invasion and Grexit, significant buyers are now pricing into their purchases the Iran-US conflict risk and the Straits of Hormuz shutdown risk. Neither being insignificant, but no longer surprises.
An Ascending Triangle formed from
An Ascending Triangle formed from the pre-open low touching the 2095.25 bias-down target. It broke higher to within 1 tick of yesterday”s 2102.75 cash session close. That”s a lot of near-term buying pressure to expend into the open without correcting it. This makes the open an inflection point that either extends higher without delay, or else reverses back down.
There”s room down to 2098-2099 during the opening 15 minutes before assuming the Triangle”s break higher was false, and that it”s being reversed down to 2090. So, I would consider buying 2098-2099, if not covering a short into it, or covering a short that bounces too high after testing it.
As for bouncing first, there”s room up to 2095 before the open”s inflection is confirmed to be durable, and not just temporary. So, I”m probably not chasing opening strength.
Here”s the pre-market Tour recording:
https://roddavid10.mitel-nhwc.com/join/wzcjmfs