S&P
The First Trade & Pre-open Tour Recording… Back to square-two.
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…
Wednesday’s late 18-point surge up to 2849.50 was retraced almost entirely overnight down to 2833.25. Thursday’s opening surge was also retraced , as were each of Thursday morning’s higher highs. Ultimately, it was an inside day, gaining no traction either way. But “unfinished business above” was left outstanding at the morning’s 2848.75 bias objective. And attempts to reverse down repeatedly failed. Despite the entire session developing in negative territory, the burden of proof was left on sellers The 4-point differential between cash session and futures 2838.25-2842.50 closes was similar to Wednesday.
Overnight action’s new info…
There was a momentary 9-10 point knee-jerk reaction down and up at the close, triggered by AMZN’s own initial earnings confusion. But the Globex session has only trended up. Attacking yesterday’s 2846.50 high to within 2 ticks before Europe’s opens had reacted down to 2842.75. Later surging 4 points pierced yesterday’s high by 2 ticks has reacted back down to 2842.75, again.
If, then…
No decline was indicated by yesterday’s pattern, only the vulnerability if buyers weren’t retaking control overnight. But, have they? Relentless overnight trending doesn’t always attract intraday reinforcements. And stronger-handed counter-trend sponsorship isn’t necessary to reverse the overnight trend — that can happen simply by the overnight trend’s sponsorship exiting. The opening 15 minutes of volatility often lets us know either way. It isn’t necessary to neutralize the “unfinished business above” at 2848.75 before reversing down, but I’ll be reluctant to short otherwise. Not reversing down would next target 2873.00 and potentially 2883.00, while this leg also requires at least an eventual third higher close. Anxiousness and anticipation ahead of this morning’s GDP is surely inhibiting and influencing price action, so a clearer picture should be visible after its release.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2846.50 would be likely to trigger the 2844.50 bias-up signal at 10:15. Exiting the open under 2840.75 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2843.75 | 2844.50 |
| …would target | 2850.50 | 2851.25 |
| Bias-down: under | 2835.75 | 2836.50 |
| …would target | 2828.75 | 2829.50 |
| Signal status: noN-BIAS, STILL TESTING BIAS-DOWN SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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)
Wednesday night’s relatively narrow 2833.50-2838.00 range seemed deceptively calm after comparing it to the open’s attack on 2844.00. But it was the open’s surge that proved deceptive, quickly retracing back down to the overnight range’s upper-end. Rallying into the noon hour was also retraced back down to the overnight range, which supported the choppy afternoon.
All of which developed in negative territory. And all within the range of Wednesday’s position-squaring window surge, which had been triggered by the US-EU tariff deal. Thursday’s overlap of Wednesday’s last upleg has created a position of strength to help recover from a decline.
A decline isn’t currently indicated. There’s only the vulnerability to testing 2829.50, 2818.00 or even “unfinished business below” at 2813.75 in search of strong-handed buyers to extend the rally’s unfinished business above. That includes Thursday morning’s 2848.75 bias objective, the new upleg’s 2873.00 target, and at least an eventual third higher close.
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))
The 1.1755 that began triggering post-close Wednesday up to 1.1787 was retraced ahead of Thursday’s ECB policy statement. But a blip-up quickly collapsed to under 1.1755, and extended down sharply to 1.1682. The nearest buy signal is 1.1740, but just closing back above 1.1725 would at least continue forming a base.
Gold Aug Contract (GC, ETF: (GLD))
Another test of recent range’s upper-end was stationed overnight when Thursday dipped to Wednesday’s low. Ending in negative territory would have confirmed the “ineffectual optimism.” Otherwise, any early strength Friday would be credible for rallying into the weekend.
Silver Sep Contract (SI, ETF: (SLV))
Still testing the recent range’s upper-end overnight, but not trending up, left the intraday session on Friday to retrace back down to Wednesday’s close. That fills its gap, so early strength Friday would be credible for extending higher through the morning. Otherwise, closing any lower Friday would target a retest of the prior week’s lows.
30-year Treasury Sep Contract (US, ETF: (TLT))
The 143-12 had held Wednesday’s bounce and resolved down overnight to attack Monday’s 142-21 low. Stopping optimistically short to within 1 tick of it before reacting up Thursday suggests that it will break lower.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s close above 68.82 improved by a dime Thursday, helping to confirm the bounce is underway and targeting 70.30 then 71.75.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Probing above 2.78 intraday in reaction to Thursday’s EIA report was retraced, but not reversed. Resuming the decline should be obvious Friday morning to avoid a bigger bounce.
Mid-day Update… Digging in.
Unfinished business above.
A funny thing happened on the way to fulfilling this morning’s 2848.75 bias objective. The noon hour was entered by a surge to 2846.50 when a NAFTA headline triggered a quick reaction down under 2842.00. The reversal’s potential down to 2836.50 was fulfilled to within 1 tick.
The morning’s bias objective was formed by barely avoiding a bias-down. Now the afternoon’s 2840.00 bias-down signal has narrowly avoided triggering. Price action has been fluctuating 2 points around either way. Back above 2841.00 should launch a retest of the highs, and presumably also fulfill 2848.75.
Otherwise, extending down would be “no-bias trending” that requires being retraced. But extending down could test 2829.50 before basing, and potentially test 2818.00. Regardless, the rally is has become entrenched enough that any downside should be only temporary.