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 Sep Contract (EC, ETF: (FXE, UUP))
Narrow overnight ranging seemed unaware of China’s devaluation. But it eventually rallied, gapping up through the 1.1725 resistance’s buy signal that had only been touched Thursday. This fulfills the second consecutive higher close required to put into play a retest of the recent 1.1850 high.
Gold Aug Contract (GC, ETF: (GLD))
Dipping overnight to 1215.30 came within a dime of filling the gap back to Thursday’s gap down. That was close enough to react up into Friday’s open, which extended higher. Closing above Thursday’s 1229.60 high is close enough to signal momentum has reversed up. “Higher prior lows” to 1238.00 is a minimum upside objective. Regardless, an intraday test of 1215.20 would have been optimal, and still would be optimal to completing a durable bottom.
Silver Sep Contract (SI, ETF: (SLV))
The decline’s 12.25 target was retested overnight, filling the gap back to Thursday’s open. Already recovering into Friday’s open extended through Thursday’s 15.48 high which would be bullish if recovered through the close. Upside potential could easily test 15.78 regardless of the resolution.
30-year Treasury Sep Contract (US, ETF: (TLT))
Thursday’s fresh low was too brief to fulfill Monday’s “warning shot,” especially when the recovery once again stopped well short of rewarding its buyers. Narrow ranging through Friday’s open eventually broke sharply lower to fulfill the closes lower objective at 144-08. The fresh low close into the weekend suggests at least a temporary lower low Monday.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to Sep, which trades at a 1.75 discount to Aug]… Thursday’s recovery above its last relative high still needed confirmation from a second consecutive higher close Friday that momentum is reversing up. The early recovery was just enough, but never extended higher intraday.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Thursday’s knee-jerk reaction up had held the 2.78 resistance which Friday morning did test. Until that’s recovered, the pattern remains likely to resume its decline.
Mid-day Update… Paradigm shift.
Morning’s rally fulfills objective, in time for afternoon bearish influence.
Is this week’s WedEX influence bearish? We’ll soon see.
Holding the post-open test of this morning’s 2802.25 bias-down signal had put into play an offsetting test of its 2811.00 bias-up signal. Attacking it to within 3 ticks at this morning’s high neutralized the objective.
Friday morning bias signals tend to persist through the noon hour, which traded flat-to-lower. Its pullback held above the morning uptrend’s last relative low, so sellers didn’t gain traction for their effort.
But now it’s Friday afternoon. The bearish WedEX is in-play, and already 2803.50 has been touched. Of course, being the afternoon’s bias-down signal in a no-bias environment means 2803.50 should define the window’s lower-end. Which it is, so far, reacting up at least 2 points.
Lower lows should be contained above yesterday’s 2800.00-2802.00 lows to maintain the open’s Isolation setup. Probing much lower would suggest something more substantial coming.
Look ahead: Economic Calendar – for Mon Jul 23, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Neither of Monday’s econ reports has a track record for influencing price action, but each is high-profile enough that any surprising data would likely have an effect.
Chicago Fed National Activity Index
8:30 AM ET
Existing Home Sales
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2810.50 | 2811.00 |
| …would target | 2517.50 | 2818.00 |
| Bias-down: under | 2802.75 | 2803.50 |
| …would target | 2797.25 | 2798.00 |
| Signal status: NO-BIAS | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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… Watch out for falling headlines.
Two bullish signals, and a wild card.
Overnight testing and retesting of 2793.50 doesn’t necessarily dictate intraday action. Regardless of its proximity to the next lower target of 2791.25, only post-open action could put it into play. Maintaining an open under 2804.00 would have done that. That’s where the open was greeted, which improved from there. So, 2791.25 is not in-play.
The overnight low and its retest both reacted back up into yesterday’s range above 2800.00-2802.00. The second reaction’s recovery persisted through the open, which forms an Isolation setup. Isolating the probe under yesterday’s lows to the overnight — so long as yesterday’s 2800.00-2802.00 lows continue holding — is usually rewarded by retracing the overnight probe’s origin. That’s 2818.00.
Meanwhile, this morning’s 2802.25 bias-down signal was touched post-open. Holding its test through 10:15 has put into play an offsetting test of the 2811.00 bias-up signal. The bias-down target was tested overnight, but only overnight, so its offsetting test isn’t required.
The Isolation setup identifies context. Its afternoons don’t necessarily extend the morning’s direction. So, we’re still monitoring for the bearish WedEX afternoon influence.