S&P
Post-open Review… A Rubicon too far.
Breaking too much resistance, too quickly.
Potential for noise above the overnight high’s China trade new reaction was attacked (to within 1 tick) at 2765.25. 
Its reaction down was underway already to greet the Employment Situation report at 2756.50. The reaction continued trending down into the pre-open’s test of this morning’s 2747.75 bias-up target as support.
Still well above yesterday’s 2741.25 highs. But the post-open bounce only retraced the payrolls 2756.50 origin, and resumed its reaction down. The 2740.50 bias-up signal triggered cleanly, only to be invalidated by breaking under it decisively through 10:30. Offsetting tests of the 2731.75 and 2721.50 bias-down parameters weren’t required, but they were met (to within 1 tick) anyway. Oversold RSIs require the low’s retest.
All of which sliced through “lower prior highs” at 2737.00-2738.25. They would usually be allowed to influence the drop. Lower lows remain possible, especially so long as bounces now hold 2733.75 as resistance (being tested now). But a bigger corrective bounce would have room up to 2741.00-2743.00.
Back under 2727.75 and 2725.25 would start to signal the decline extending — especially during the bias environment lapsing and noon hour entry. This is Friday, so Friday Factors apply, like the morning’s bias signal persisting through the noon hour.
The First Trade & Pre-open Tour Recording… Turn of events.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Thursday morning’s wide swings triggered multiple signals, up and down, that all produced multi-point moves within minutes. They all also reversed to and through their triggers, substantially. Trump threw a China trade tweet into the mix, creating a bottom at 2708.00 and a surge through the 2720.00 open to 2731.00. Wide swings were replaced by grinding higher through the morning bias environment, noon hour, and afternoon bias environment. Multiple opportunities were ignored to accelerate the pace, finally breaking higher after becoming too late to gain traction for the effort. A very late blip-up to the 2741.00 objective was consolidated through the close.
Overnight action’s new info…
A Tale of Two Markets. First, AAPL’s earnings disappointed as its chart had suggested, triggering a reaction down to Thursday’s 2726.00 opening highs. Globex immediately probed lower to 2723.00, and just as quickly began firming up to 2730.00. A surge attacked Thursday’s high before retracing back down to 2730.00 by midnight. And then came the news — another favorable China trade headline, which triggered a 14-point spike up to 2747.75 that extended another 17 points to test 2764.00, ranging sideways since Europe’s opens. There’s room for noise to fresh highs at 2766.50.
If, then… (notes to accompany the Tour recording)
Closing above Wednesday’s 2737.00 high would have been bullish, had the breakout been underway prior to ignoring the timely breakout opportunities. Breaking higher later isn’t strong-handed sponsorship. So, now trading higher overnight — regardless of by how much — the question is whether yesterday’s post-close dip neutralized the late breakout’s “ineffectual optimism,” which would next target 2773.50 and 2786.75. Otherwise, yesterday’s late ineffectual optimism could apply as much to AAPL’s earnings as to this morning’s Employment Situation report. And any initial weakness would be credible for extending down, confirmed under 2750.75, and targeting 2729.00-2731.50.
First Trade…
[Click here to view the Bias parameters] Preliminary indications are normally unavailable prior to Employment Situation reports. However, relevant levels above are 2773.50 and 2786.75; relevant levels below are 2750.75 and 2733.75.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2740.25 | 2740.50 |
| …would target | 2747.50 | 2747.75 |
| Bias-down: under | 2731.25 | 2731.75 |
| …would target | 2721.00 | 2721.50 |
| Signal status: INVALIDATED BIAS-UP, BIAS-UP TARGET MET | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
If there were any single-worded tip to navigating Thursday morning’s wide swings, it is impatience. Multiple signals, up and down, all triggered multi-point moves that were produced within minutes. Even more quickly, the moves were retraced to their triggers and then quickly reversed in the opposite direction. Substantially.
If there were any single-worded tip to navigating Thursday afternoon’s narrow ranging, it is patience. And a lot of it, because the narrow ranging actually began at the morning’s bias-environment exit. At least we knew which way the range was likely to resolve, which would probably be different from Wednesday’s collapse after also ignoring breakout opportunities.
Perhaps the afternoon inhibition / anxiousness was due to AAPL’s post-close earnings (which we discussed intraday would be greeted from a position of weakness). This could have formed backing-and-filling instead of eking higher. The former would have been defensive posturing and potentially bullish from a contrarian perspective. The latter’s optimism was potentially bearish. More so, after fulfilling the minimum requirement to probe Wednesday’s 2737.00 high and preferably touch 2741.00.
Closing above Wednesday’s 2737.00 high would have been bullish, had the breakout been underway prior to ignoring the timely breakout opportunities. Instead, it is potentially bearish from a contrarian perspective. And having stretched the optimistic rubber band intraday, without validation from the post-close earnings, the entire retracement of Thursday morning’s Trump tweet headline reaction is free to be retraced — there may even be an air pocket under Thursday afternoon’s range.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot…
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 Dec Contract (EC, ETF: (FXE, UUP))
Wednesday’s second consecutive confirming close under Tuesday’s breakout requires an eventual third lower close before a durable bottom can form. That unfinished business below didn’t prevent Thursday’s gap up back to the upper-end of the original 1.1430 target. Extending to 1.1463 intraday filled Monday and Friday’s gaps, so any initial weakness Friday would be likely to extend down into and out of the weekend.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s second consecutive confirming close under Tuesday’s break under the 1228.00 sell signal didn’t prevent Thursday’s gap up to and through 1228.00. Extending higher intraday tested 1239.00, with room to also test 1241.00 before suggesting more than a temporary detour before eventually fulfilling the minimum required third lower close.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s gap down had held 14.28 support whose break would have confirmed lower lows remain in-play. That vulnerability was exploited overnight and Thursday’s gap up to and through 14.40 extending sharply higher intraday to test 14.80. Closing back under 14.70 would now resume the decline.
30-year Treasury Dec Contract (US, ETF: (TLT))
Still no catalyst for a flight-to-safety, Thursday morning wasn’t inhibited from probing under 138-04. But only temporarily as the balance of the session recovered to close back above 138-04 in positive territory– again, despite no catalyst, suggesting that the lower-end of a range is set.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s confirmation of Tuesday’s breakout under 66.21 wasted no time fulfilling its minimum requirement for at least a third lower close on Thursday. Fresh lows at 63.11 could extend lower so long as bounces now hold 65.25 as resistance.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Closing just above the 3.25 buy signal Wednesday extended higher overnight to 3.32. But Thursday ‘s open was greeted unchanged while dipping back down to 3.21. The close recovered to unchanged, still in position to extend the recovery.