S&P
The First Trade & Pre-open Tour Recording… Relentlessly higher overnight.
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’s pre-open recovery had extended post-open to attack 2844.00. That was just the first hour. Despite triggering the 2040.75 bias-up signal and putting into play its 2847.75 bias-up target, a 22-point, 2-1/2 hour drop exited the noon hour back at the 2820.50 overnight lows. That was structural support, and also calculable support for being the afternoon’s bias-down target. The 2826.00 bias-down signal was recovered just in time to avoid triggering, extending to test its 2833.75 bias-up signal’s resistance. Sliding through the balance of the session attacked session lows.
Overnight action’s new info…
Initially firming attacked and then tested 2832.00 by midnight, still far enough below yesterday afternoon’s high to not be considered “stopping pessimistically short.” Nevertheless, extending higher into and out of Europe’s opens has attacked 2839.00. Its 6-point reaction held at test of 2833.00, and another bounce is within 1 point of fresh highs.
If, then…
(The correct value for bias-up is 2830.50)… “Unfinished business above” was left outstanding at the morning’s 2847.75 bias-up target. Monday morning’s Isolation setup was all but invalidated. Friday’s breakout was essentially confirmed. Gapping up Tuesday above Monday afternoon’s 2833.50 high, after having trended down into Monday’s close, would form a “session-long rally” setup. The Isolation setup would get a reprieve, and the confirmed breakout would get a detour. Otherwise, at least a third lower close is now required. Meanwhile, overnight trending has been relentless, which is always more vulnerable to a post-open reversal. And if the overnight margin above afternoon’s 2833.50 high remains so obvious getting closer to the open, then NOT maintaining it post-open could be as bearish as the setup would have been bearish.
First Trade…
[Click here to view the Bias parameters] (There was an error in publishing this morning’s bias-up signal. Its correct value is 2830.50)… Exiting the open at 9:45 above 2832.75 would be likely to trigger the 2830.50 bias-up signal at 10:15. Exiting the open above 2837.50 would be likely to exceed the 2836.00 bias-up signal through 10:15 to renew the bias-up signal.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2830.25 | 2830.50 |
| …would target | 2835.75 | 2836.00 |
| Bias-down: under | 2822.00 | 2822.25 |
| …would target | 2816.25 | 2817.00 |
| Signal status: LATE BIAS-UP | . | |
| 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)
The oddest part of Monday’s pattern isn’t its 22-point 2-1/2 hour drop from the morning’s attack on 2844.00. It isn’t the “unfinished business above” at the morning’s 2847.75 bias-up target, or the retracement required up to its 2040.75 bias-up signal. It’s not the Isolation setup that produced the optimal opening behavior.
The oddest part of Monday’s pattern hasn’t yet happened. And it might not. But it would be Tuesday’s gap up above Monday afternoon’s 2833.50 high, which — after having trended down into Monday’s close — would form a “session-long rally” setup. Like Monday’s Isolation setup, the optimal open would not only maintain the gap up but also trend up.
Like Monday’s setup, an optimal recovery open Tuesday could also reverse into an intraday decline. But that wouldn’t be so odd, considering Monday’s failure to exploit other recovery opportunities.
Triggering a session-long rally would also help to reject by proxy Monday’s close just slightly under Friday afternoon’s low, which the Isolation setup needed to hold. And it would undermine any momentum from Monday’s second consecutive lower close under Friday’s breakout close.
Otherwise, at least a third lower close is now required. Perhaps more would follow, regardless of the unfinished business above, which includes a bias-up target at 2866.25 left outstanding last week.
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 Sep Contract (EC, ETF: (FXE, UUP))
Closing at fresh trend extremes on Friday all but ensures probing another extreme at some point on Monday. Which Sunday night did easily on continued Turkish Lira issues. Rallying in reaction to a potential softening of Turkey sanctions was short-lived, or at least corrected. There is no longer “unfinished business below,” but not yet a buy signal.
Gold Dec Contract (GC, ETF: (GLD))
Two-three bounces last week each held relevant resistance while maintaining the pattern’s downside momentum. Monday’s gap down far below the range extended down intraday. Closing at or under 1201.50 keeps alive the break’s momentum, next targeting 1188.50-1191.50. And that could confirm Monday as a breakout.
Silver Sep Contract (SI, ETF: (SLV))
Delaying repeatedly the outstanding attraction down to 15.25 had become likely to probe it much deeper in compensating for the delay. Sunday night’s probe did extend down to fresh lows under 15.00. Which qualifies as a breakout from the multi-session range, so a second consecutive lower close on Tuesday would require at least an eventual third lower close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Monday moring’s dip back down to 144-00 fluctuated sideways into the afternoon, still not resuming Friday’s rally despite having the same catalysts of Turkey turmoil and stock market weakness. A deeper reaction would still have room down to 143-12 before reversing the trend back down.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s inside day was biased-up to reflect weak-handed buyers. Already weaker Sunday night, price slid further through the open and collapsed during the morning to fresh lows. No buy signal is considered in this pattern until closing back above at least a prior low. Which will make it difficult or unlikely for Tuesday to form a position of strength ahead of Wednesday morning’s EIA report (let alone Tuesday’s post-close API).
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Overnight weakness fell slightly lower Monday morning, which wasn’t surprising after three consecutive sessions at recovery highs had failed to extend. But the dip, even if it were to extend deeper Tuesday, would be likely to recover because the same consolidation took so long to attempt rejecting its target area.
Mid-day Update… Cleaning out sellers.
Was the intraday slide just rejected?
The noon hour tested both this afternoon’s 2826.00 bias-down signal and its 2820.50 bias-down target. A very late surge invoked the grace period, which then recovered enough to trigger no-bias. So, an offsetting test of both bias-up parameters is in-play.
And that’s after this morning’s rally attacking 2844.00. Its bias-up triggered cleanly, probing the pre-10:15 high, which usually confirms the current trending intends to fulfill its target. Usually. Breaking under its 2840.75 bias-up signal is like no-bias trending that requires being retraced, along with the 2847.75 bias-up target that became “unfinished business above.”
Meanwhile, the optimal open for an Isolation setup has been followed by the most sub-optimal price action possible, without yet invalidating it. Isolating the probe under Friday afternoon’s 2826.00 low to the noon hour is keeping alive the setup, but no rallying further this afternoon would all but kill it.