S&P
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2781.75 | 2786.00 |
| …would target | 2788.75 | 2793.00 |
| Bias-down: under | 2769.25 | 2773.50 |
| …would target | 2762.50 | 2766.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
FOMC days are fun, more so when accompanied by the Fed Chair’s quarterly Q&A. The morning’s sponsorship triggered bias-up but left its 2798.00 target outstanding. It remains outstanding after attacking it to within 2 points at the morning’s retest of the 2796.00 overnight high.
Drifting into the FOMC statement triggered a drop to 2784.50 that extended to 2781.50. The Q&A triggered a rally to 2793.50. Then the nothingness triggered a reversal down to fresh lows. The cash session close was testing 2779.00-2780.00, and futures settled another 2 ticks lower.
The 2783.00-2784.00 area has been relevant support on Monday and Tuesday, as well as being last Thursday’s high. Probing under it when coming within 3 minutes of the cash session close triggered a very last-minute bearish WedEX. Probing it any later or not probing it at all would have triggered no signal.
Narrowly triggering the signal still qualifies, but it’s not optimal. Gapping up Thursday and exiting the open above 788.00-2788.75 would serve by proxy to reverse the signal to passively bullish. Meanwhile, the setup usually doesn’t influence price action until Friday afternoon and Monday morning, but not rejecting it could produce the bigger dip I had described in Wednesday’s First Trade.
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 Jun Contract (EC, ETF: (FXE, UUP))
Tuesday’s dip to the 1.1745 sell signal reacted up again Wednesday, shallowly at the open with only a little follow-through before the afternoon’s FOMC policy statement. The reaction dropped back down to 1.1745, almost greeting Thursday’s ECB monetary statement from a position of weakness.
Gold Aug Contract (GC, ETF: (GLD))
Ongoing fluctuation between 1296.50-1307.00 had retested the range’s lower-end by $2 overnight. It held intraday, and was attacked again after the close in reaction to the FOMC policy statement.
Silver Jul Contract (SI, ETF: (SLV))
Another shallow reaction down overnight from the 16.95 target stopped short of the 16.80 sell signal before recovering to gap up slightly Wednesday and test fresh highs at 17.00. The post-close FOMC reaction dropped back down to attack Tuesday’s 16.85 close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Tuesday’s narrow ranging persisted through Wednesday morning ahead of the afternoon’s FOMC policy statement wasn’t much different from the post-FOMC price action. Perhaps a little weaker, and still having potential to test 142-00 as support.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Post-close weakness from the API report was temporary. Wednesday’s gap down was shallow, and reacted up to a fresh recovery high attacking 66.90 after the morning’s EIA report and the afternoon’s FOMC statement. There is no bullish excuse to further delay the rally becoming obvious.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Tuesday night’s test of 2.98 was attacked intraday Wednesday. The minimum target of 3.00 and the minimum objective of at least one more new trend high close remain outstanding. Thursday’s EIA report is being greeted from a position of strength.
Mid-day Update… Pins AND needles.
Waiting for the FOMC news.
Opening at the morning’s 2792.50 bias-up signal eked higher through the morning to touch the 2796.00 overnight high. That’s an intraday test above prior intraday highs. Trending back down through the noon hour probed the open’s 2790.75 low by 3 ticks. That’s the minimum margin to make the fresh low non-arbitrary.
Rejection of a fresh high? Maybe. Maybe a premature warning. Maybe a false warning.
This morning’s bias-up signal triggered, and its 2798.00 bias-up target has become “unfinished business above.” A decline could form first, and be productive. That’s not common, but neither are FOMC policy statements. Regardless, an initially favorable knee-jerk reaction up that reverses back down is the most bearish scenario. Ultimately trending up above overnight highs is the most bullish.
Don’t forget that the policy statement is followed a half-hour later by the Fed Chair’s quarterly Q&A. This tends to be the month’s most opportunistic window for quick, big moves. Be careful if positioned already ahead of either news.
Look ahead: Economic Calendar – for Thu Jun 14, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: FOMC is followed Thursday by the ECB, which is followed by Mario Draghi’s press conference. Although the calendar remains active for the day, none of its reports have a track record for influencing price action. Meanwhile, World Cup Soccer “kicks” off. It lasts a month, but its greatest distraction is early before any countries are eliminated.
*ECB policy statement / Draghi Q&A
7:45 AM / 8:30 AM ET
Jobless Claims
8:30 AM ET
Retail Sales
8:30 AM ET
Import and Export Prices
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Business Inventories
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET