S&P
Post-open Review… Aaaand, it’s off.
Pre-open rally fizzles.
Yesterday afternoon’s bounce gained no traction for its effort. So, immediately extending the rally today required gapping up above yesterday’s highs. Rallying overnight to test 2934.00 created a 5-point margin.
Not enough.
The open was greeted just 2 ticks under yesterday’s morning’s 2929.50 high. Immediately rallying from there still would have been credible, but the pre-open dip extended down to 2924.00. This morning is a no-bias environment.
The 2930.50 bias-up signal wasn’t touched post-open, so it wasn’t actually rejected, so no offsetting test of the 2921.25 bias-down signal is in-play. Either signal should hold if tested this morning.
Lower lows aren’t required, but there’s room for noise down to 2921.25 which must hold 2919.00 to avoid anything more substantial. Back above 2927.75 would start to signal another rally effort underway, albeit probably limited until the afternoon bias environment starts lapsing.
The First Trade & Pre-open Tour Recording… It’s on.
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…
Monday was paralyzed by anxiousness. The session was caught between two external inputs: China tariffs going into effect triggered a gap down to 2930.00 Sunday night, and fear for a response kept the overnight range trapped between 2925.00-2930.00. Post-open action quickly tested relevant supports at 2921.25 and 2919.00. Political intrigue triggered a blip-down to test 2918.00 that was otherwise irrelevant, and quickly absorbed. Ultimately, intraday selling pressure didn’t extend, but neither was it reversed, as bounces kept probing back above the 2925.00 overnight lows. The afternoon’s bounce missed a couple of setups to gain traction, and no new “unfinished business” was left outstanding.
Overnight action’s new info…
Monday’s recovery back above 2925.00 initially ranged flat-to-lower from the Globex open. Recovering into Europe’s opens extended steadily back up to Sunday night’s 2930.00 highs, and to this morning’s 2930.50 bias-up signal. Suddenly, price is surging back up above Friday’s lows to test 2933.50.
If, then… (notes to accompany the Tour recording)
Having failed to gain traction Monday afternoon, rallying Tuesday morning all but requires gapping up. And being likely to rally, this morning was likely to gap up. Overnight action is certainly trying, but it must still negotiate Friday’s “higher prior lows,” and of course this morning’s bias-up signal. Otherwise, another intraday dip is possible while still being likely to recover last week’s highs — perhaps to “lower prior highs” at 2914.00 — so long as 2919.00 recovers through the window that probes it.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2932.50 would be likely to trigger the 2930.50 bias-up signal at 10:15. Exiting the open under 2927.75 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2925.50 | 2930.50 |
| …would target | 2931.00 | 2936.00 |
| Bias-down: under | 2916.25 | 2921.25 |
| …would target | 2910.50 | 2915.50 |
| Signal status: NO-BIAS | . | |
| 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)
Monday’s response to the China tariffs was predictable. Perhaps the session was inhibited by anxiousness awaiting a response from China. None of which matters to the pattern, so long as it reactions hold relevant levels through relevant windows.
The week began by gapping down Sunday night. Its 2925.00-2930.00 range broke lower Monday morning to test 2918.00. Two intraday attempts to at least recover the overnight range were able only to test 2926.00. Buyers were unable to gain traction for their effort.
Meanwhile, Monday’s selling did satisfy selling pressure down to 2921.25. And 2919.00 avoided breaking lower through a relevant window. So, sellers didn’t gain traction for their efforts either. Another intraday dip is possible, perhaps to “lower prior highs” at 2914.00, so long as 2919.00 recovers through the window that probes it.
Tuesday morning isn’t any likelier to probe higher or lower. And rallying in the morning all but requires gapping up. And Monday’s range should resolve up to avoid extending the decline substantially.
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))
opened Monday within the Tu-Fri multi-session range, then surged to fresh highs above 1.1890 to attempt a breakout. But the afternoon was greeted back within the range, and back under 1.1785 would start to seal a top.
Gold Dec Contract (GC, ETF: (GLD))
Friday’s reversal of fortune that went out testing the 1201.50 sell signal was reversed again Monday to attack the 1209.50 buy signal. But the range persisted.
Silver Dec Contract (SI, ETF: (SLV))
Closing at or above the 14.33 buy signal Friday persisted through Monday, still fluctuating around 14.33 without either extending or reversing back down.
30-year Treasury Dec Contract (US, ETF: (TLT))
Closing above 140-04 had signaled the decline’s momentum was lapsing, with corrective bounce potential to 141-16, but Monday only ranged back down to and around 140-04.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s gap up on production news extended to fresh highs at 72.40. That was probed Monday morning up to 72.75, with the next higher objective being 73.90-74.20.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
The two-day multi-session Thu-Fri range broke higher Monday morning to fresh highs for the recovery up to 3.04. Being a breakout, a second consecutive higher close on Tuesday would entrench the rally by requiring at least an eventual third higher close.