S&P
Mid-day Update…
Pre-open break retraced only by proxy.
The likelihood for retracing the late pre-open break from 2727.25 is diminishing as this afternoon’s 
bias environment starts attacking the morning’s 2707.00 low. The interim bounce was still somewhat successful, probing back above the open’s highs. Also, its 2722.00 peak retraced 61.8% of the pre-open portion of the late break.
And now triggering this afternoon’s 2715.00 bias-down signal makes the decline more reliable. And retesting this morning’s low so soon makes its support less reliable. Extending any lower could target Tuesday afternoon’s 2691.00 “lower prior highs.”
A path higher remains possible, since retesting this morning’s low would also neutralize the required retest of its oversold RSIs. And this afternoon’s 2707.50 bias-down target has been met already, satisfying its selling pressure. So, a quick reaction up that recovers 2713.75 could shift sentiment very quickly to optimistic.
Look ahead: Economic Calendar – for Fri Jun 1, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Employment Situation report is high-profile and reliable for influencing price action. It’s also often released with fewer other reports. But this is still a holiday-shortened week, and Friday’s calendar is still busy. Any noticeable reaction to the pre-open payrolls is likely to be duplicated by post-open reports.
*Employment Situation
8:30 AM ET
PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2726.00 | 2725.25 |
| …would target | 2731.25 | 2730.50 |
| Bias-down: under | 2715.50 | 2715.00 |
| …would target | 2708.00 | 2707.50 |
| Signal status: BIAS-DOWN | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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… Rubber band stretch.
Late pre-open break has tested supports.
Late pre-open breaks from narrow directionless overnight ranges are often fully retraced back to their origin, much sooner rather than later. That’s our anticipation for this morning’s drop from 2727.00 down to 2716.00. Especially after also anticipating the break would extend down to 2715.00 and potentially 2711.00, and has.
I reiterated these downside objectives in my last-minute update to the chaRTroom. I also noted that we don’t know which if either of 2715.00 or 2711.00 would launch the break’s recovery, or how the break’s complete recovery would then resolve. Price action on the way back up should be clues informing the latter.
The 2718.75 bias-down signal has triggered. Its 2710.50 bias-down target has been met to within 3 ticks. It could be met entirely, but won’t become “unfinished business below” if left outstanding. Meanwhile, this is still a bias-down environment, and the morning may break lower still.
Recovering the 2718.75 bias-down signal through the bias environment lapsing would bullish, especially if confirmed above 2721.50. The minimum objective would be to retrace the pre-open break, and potentially to resume yesterday’s rally.
The First Trade & Pre-open Tour Recording… Playing possum.
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 11-point gap up consolidated through the open, holding above the bias-up target to renew the bias-up signal. The second hour resumed the overnight rally to first test 2715.00, which was the bounce limit for defining the rally as only a correction off of Tuesday’s 2675.00. Extending into the afternoon bias environment peaked upon testing the 2727.25 bias-up target, which was probed momentarily by 2 points. A sell signal triggered too late to be sponsored by strong hands, limiting its reaction down to only a minimum 2721.50 target. No “unfinished business above” was left outstanding.
Overnight action’s new info…
Yesterday’s late dip reacted back up through the close 5 points from its 2721.50 target to 2726.50. Globex gapped down to pierce what is this morning’s 2718.75 bias-down signal, which supported a brief consolidation that soon resolved back up. But resolving up only peaked upon retesting yesterday afternoon’s 2727.25 resistance, which has reacted back down to 2721.50.
If, then…
While Wednesday’s late dip to its 2721.50 target was sponsored by weak hands, the dip did serve to chip away at support there. Its intraday retest isn’t any likelier, but its intraday retest is now less likely to hold as support. Still, its break has room down to 2711.00 before signaling the trend reversing back down. Otherwise, having recovered to close above 2715.00, fresh highs are likely to probe above 2733.00. Meanwhile, keep in mind there is potential this week for a third session characterized by gapping open and running in the gap’s direction until fulfilling its objective. If today’s session is not that session — and it is currently indicated not to gap open — then that potential would compound and transfer to Friday.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2727.25 would be unlikely to trigger the 2730.00 bias-up signal at 10:15. Exiting the open above 2725.25 would be unlikely to trigger the 2718.75 bias-down signal.