S&P
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2824.25 | 2824.50 |
| …would target | 2830.25 | 2830.50 |
| Bias-down: under | 2814.50 | 2815.00 |
| …would target | 2807.50 | 2808.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| 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)
First of all, Monday’s Isolation setup is invalidated. That’s mostly due to the overnight 20-point slide that greeted Wednesday’s open under Monday’s lows. Collapsing another 23 points through the open didn’t help. The morning’s drop never extended, despite being corrected through the noon hour back up to 2819.00. That’s potentially “ineffectual optimism,” which keeps the door open to probing fresh lows Thursday down to 2802.00.
Meanwhile, the next lower objective held two tests intraday at 2808.00. That would have been more bullish had the afternoon’s retest also probed under the morning’s low before recovering. Which also keeps the door open to probing fresh lows Thursday down to 2802.00.
Wednesday’s last upleg attacking 2823.00 was triggered by a non-financial headline, so retracing to its 2811.00 origin is likely. That happened to be an active buy signal, but the artificial catalyst crowded out the organic sponsorship. Its attraction below could help to start a reversal down, which also keeps the door open to probing fresh lows Thursday down to 2802.00.
Friday’s confirmed breakout had required an eventual third lower close, which Wednesday narrowly delivered. That doesn’t care about any doors open below. The decline could still extend, but gapping up enough Thursday could launch a recovery leg.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot… Euro and Metals reversals imminent?
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 Sep Contract (EC, ETF: (FXE, UUP))
Still trending down overnight greeted Wednesday’s open with a slightly lower gap that extended to fresh trend lows. That was retraced into the noon hour, then probed positive territory. The open was just under Tuesday’s low to require being filled from above — which it was, before entering the noon hour. Closing above 1.1385 would signal momentum reversing up.
Gold Dec Contract (GC, ETF: (GLD))
Already dipping into the 1188.50-1191.50 target area overnight, Wednesday’s gap down extended lower through the morning to attack 1182.50. The 4-day sequence suggests that Thursday will either not probe fresh lows or else recover from fresh lows, and in either case probe positive territory. A corrective bounce into the weekend would target 1208.00.
Silver Sep Contract (SI, ETF: (SLV))
Even further compensation for the delay in filling the 4-week old gap back to 15.25 opened Wednesday sharply under Tuesday’s 14.97 low to 14.80, and collapsed down to 14.35. Tuesday was somewhat of a breakout, so this is somewhat of confirmation, an at least an eventual third lower close is likely — regardless of an interim corrective bounce.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday’s gap up extended through Friday’s 144-22 high to test 145-00, then reversed back under Friday’s high. Not closing above 144-22 Wednesday would suggest a top is in, and the breakout isn’t valid.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already greeting Tuesday’s post-close API data from a position of weakness and reacting poorly, Wednesday’s 50-cent gap down to 66.50 fell another $2 to fresh lows at 64.50 in reaction to the morning’s EIA report. Closing above 66.10 would signal momentum reversing up.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report isn’t being greeted from a position of strength. Tuesday’s premature probe of fresh highs, which barely qualified as a breakout, wasn’t confirmed by a second consecutive higher close Wednesday. Avoiding a deeper pullback Thursday — or recovering from an initially negative knee-jerk reaction — would be the only bullish scenario.
Mid-day Update… Corrected.
Bounce into the afternoon relieves oversold condition.
This test of 2808.00 gradually grinded its way down to 2803.00, just 1 point short of its room for noise. Bouncing into the bias environment’s exit easily recovered 2808.00, so that’s one test held.
The bounce extended through the noon hour exit. Its minimum likely objective of 2818.00 was probed by 1 point, but held the 2815.00 bias-up signal to trigger late no-bias. Its reaction down is now testing 2811.00, with room to the 2806.75 bias-down signal during the no-bias environment.
Until the bias environment starts lapsing. Or sooner, as no-bias trending.
One or the other (or both) is likely. Whether to extend the decline into something more durable, or to hold another test of 2808.00, bouncing out of the bias environment isn’t likely. Back above 2818.00 could start behaving bullishly, but a test of 2802.00 remains likelier.
Look ahead: Economic Calendar – for Thu Aug 16, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: An unusual Thursday for not being the econ calendar’s busiest day. But three high-profile reports due before the open are released simultaneously, one of which has its own track record for influencing price action.
Housing Starts
8:30 AM ET
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET