S&P
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))
Recent “ineffectual optimism” wasn’t exploited Wednesday, which left the door open to extending down aggressively Thursday. To the contrary, fresh highs overnight gapped up sharply Thursday to test 1.1865, still having room up to 1.1845 before abandoning any near-term vulnerable to launching a new downleg — which would be confirmed only upon closing under 1.1785.
Gold Dec Contract (GC, ETF: (GLD))
The 1201.50-1209.50 range’s upper-end was probed overnight, and again intraday Thursday up to 1213.00. Triggering it, and then confirming with a second consecutive higher close into the weekend would launch a new upleg, albeit likely temporary with unfinished business below still outstanding. Not triggering the 1209.50 buy signal, or not confirming it, could instead stretch the rubber band to snap back down.
Silver Dec Contract (SI, ETF: (SLV))
Probing the 14.33 buy signal overnight, or perhaps more accurately just overlapping it up to 14.38, was unable to trigger Thursday. But almost any further strength early Friday would be likely to extend higher into the weekend.
30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s early trading held a retest of the 139-26 support that had also held Wednesday, before reversing up to attack 140-20. Closing above 140-04 robs the decline of its momentum, so an immediate dip Friday would be likelier to hold if not also reverse up into the weekend.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to NOV, which is trading at a 25-cent discount to OCT]… Fresh highs overnight up to 71.35 were attacked post-open up to 71.25, as part of the same range, so no fresh high is required in this setup. More predictive is whether the confirmed breakout’s third higher close is fulfilled above 70.75. Closing under 69.05 would reverse the trend down.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength. Its knee-jerk reaction down to 2.88 snapped back up and extended sharply higher to 2.99, establishing the new rally leg underway.
Mid-day Update… Steeeeretched.
Not done, but overdone.
The open’s one opportunity to reverse down from gapping up was under 2927.00. But it was probed by only 3 ticks, and never any deeper than its first 3-4 minutes. 
It was also the post-open low. Price action since then has trended up relentlessly to 2938.50.
The degree to which the rally has reached doesn’t make it any more vulnerable to peaking, or to pausing, or to reversing. But it just tested this afternoon’s 2936.50 bias-up signal and fail to trigger. This is a late no-bias environment.
Trending strongly intraday to new highs through multiple consecutive timing windows is difficult to reverse. So, reversing down is unlikely. The setup tends to be followed by a lot of buyers below the market, their limit orders acting as buffers to rolling over.
Nevertheless, the futures premium to its underlying cash has contracted by 2 ticks since yesterday, so at least a shallow a pause or backing-and-filling is possible. The no-bias environment has room to test its 2929.50 bias-down signal just as noise. Probing deeper would be “no-bias trending” and require being recovered. That, or after the bias window starts lapsing, could extend down to 2925.00 or 2920.25 if the unlikely develops.
Look ahead: Economic Calendar – for Fri Sep 21, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: So-called quad witch expiration, with only one econ report due, which isn’t very high-profile but does have a track record for influencing price action.
*PMI Composite FLASH
9:45 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2931.00 | 2936.50 |
| …would target | 2935.75 | 2941.25 |
| Bias-down: under | 2923.75 | 2929.50 |
| …would target | 2918.50 | 2924.25 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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… Pent-up.
Gap up extends.
Yesterday’s 2918.75 high was being attacked when I recorded this morning’s pre-open Market Tour, and published the First Trade blog post:
“If overnight price improvement is going to be predictive, then it’s time to start being obvious about it.”
The market soon obliged by surging up to 2927.00. The open was greeted several ticks higher, and the opening 15 minutes of volatility trended up to establish strong-handed sponsorship. Post-open action has extended already up to 2933.00.
Gapping up does two things. First, it entrenches the rally. So, even if price were to collapse suddenly, today’s gap up above all prior highs will need to be retested eventually from below. Second, gapping up serves by proxy to convert yesterday’s WedEX to actively bullish. That refers to expiration’s influence tomorrow afternoon, but any interim dip should recover.
Keep in mind that historically a trend extreme is very unlikely at expiration. In case of a pullback today, the rally’s health depends on not yet touching “lower prior highs” from yesterday.