S&P
The First Trade & Pre-open Tour Recording… Not the warmest welcome back.
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…
Thursday night’s probe above Wednesday’s highs up to 2737.75, fulfilling the likelihood that had been expected anticipated for two days. Its vulnerability to reversing down was anticipated as intraday action, but that already appeared as an 18-19 point slide to 2716.00 before Friday’s open. That also formed a bearish setup whose influence could persist after the weekend, having rejected fresh overnight highs to open back under earlier overnight lows. The bearish influence definitely persisted intraday by leaving “unfinished business above” at 2730.75 after holding a test of the morning’s bias-down signal. The afternoon’s fresh lows at 2713.75 didn’t extend down, which would have been surprising after already holding relevant support on a Friday morning. Bouncing into the close up to 2722.00 ended at 2718.00-2720.00.
Overnight action’s new info…
Sunday night’s gap up to 2730.75 was presumably triggered by news of the N. Korea meeting’s reinstatement. Being “unfinished business above” from Friday, its resistance held until Europe’s opens. Being a knee-jerk reaction to non-financial news, the gap up was retraced down to 2718.25 by Monday morning. The holiday Globex session ended unchanged from Friday’s close. Monday night’s firm open attacked 2725.00 then eventually gave way to 2717.50. Only a brief bounce delayed tumbling through Europe’s opens down to 2690.25, the lowest levels in over two weeks.
If, then…
Friday’s open had rejected the overnight probe above Thursday’s highs by opening under the earlier overnight lows. Unless recovered through the open or the close, the setup’s bearish influence tends to extend through the following open, or else for multiple sessions. Retracing Sunday nght’s gap up can be attributed to that influence, despite the gap’s catalyst being only temporary, since the headline’s retracement didn’t otherwise have any timing element. So, if the setup’s bearish influence is persisting beyond yesterday’s influence, then it’s likely to persist through today. A post-open bounce off of support is still possible, but bounces should resolve down. Isolating the plunge to the overnight is the minimum requirement to abandoning any near-term bearish outlook — not impossible, but requiring a significantly higher open, preferably above 2716.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2701.50 would be unlikely to recover the 2708.00 bias-down target by 10:15, renewing the bias-down signal, and essentially targeting 2683.50 and 2679.00.
Look ahead: Economic Calendar – for Tue May 29, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The holiday-shortened week has the usual report flow, but presented in fewer days. Only one high-profile influential report is scheduled for release post-open Tuesday. The pre-open Housing sector report could be influential if it deviates last week’s four other Housing sector data.
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
4-Week Bill Auction
1:00 PM ET
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2724.25 | 2723.00 |
| …would target | 2731.00 | 2729.75 |
| Bias-down: under | 2716.50 | 2715.50 |
| …would target | 2709.00 | 2708.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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)
Friday morning left “unfinished business above” at 2730.75. Testing it early enough would have left the afternoon vulnerable to retesting the morning’s lows. They were retested anyway, and without the bother of rallying intraday.
Intraday selling resumed at noon, literally not until the morning’s bias environment had fully lapsed. The morning’s 2716.25 lows ultimately held an afternoon test down to 2713.75. A late bounce touched 2722.00 at the close. Sellers weren’t absorbed, despite the usual seasonally bullish influence of a 3-day holiday weekend.
Globex opens normally Sunday night and trades through Monday’s noon hour. I’ll monitor for any necessary or helpful updates.
Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO SATURDAY REVIEW THIS HOLIDAY WEEKEND.
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))
Thursday’s bounce had touched “higher prior lows” so that Wednesday’s 1.1731 opening gap could be retested and its attraction below neutralized. Its attraction below was more powerful than that, and Friday opened at fresh lows down to 1.1692, testing 1.1663. The possible bottoming pattern never completed, and the nearest buy signal is now back above 1.1750.
Gold Jun Contract (GC, ETF: (GLD))
Gapping up to the 1298.50 buy signal Thursday extended higher to qualify as a breakout, despite leaving plenty of unfinished business below at the week-long channel. It still has potential to extend higher and test 1316.00-1317.50, despite Friday not confirming Thursday’s breakout. Otherwise, closing back under 1298.50 would signal the breakout was false and already reversing down.
Silver Jul Contract (SI, ETF: (SLV))
Gapping up back above Tuesday’s 16.55 low Thursday and extending to test Tuesday’s 16.70 high would have signaled the trend detouring up, but Friday needed to close higher for confirmation. Instead, a blip-up was reversed back down to test 16.55 through the afternoon. Almost any initial weakness coming out of the weekend would at least be vulnerable to resuming the decline, if not likely.
30-year Treasury Jun Contract (US, ETF: (TLT))
Reacting down intraday from Thursday’s test of the original 143-07 sell signal had held above its 142-20 pullback limit, which was pierced by 1 tick overnight before resuming the rally. Friday’s gap up to 143-12 extended intraday to attack 143-30. Now 142-20 is a sell signal if broken through the close.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The pullback from Tuesday’s 72.90 high was optimal when Wednesday’s low held 71.00 above Friday’s pullback low. Thursday’s gap down under both could have been recovered if done immediately and maintained, but its immediate recovery attempt was retraced into the close. Thursday’s session has proved to be a paradigm shift, made clearer by Friday’s gap down to 68.75 and extension to 67.50. There’s still room for noise at 67.35, but back above 68.90 would start to trigger an upleg targeting 70.40 if not also the rally’s 74.20 target.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Friday’s fresh high was retraced to spend the afternoon fluctuating around Thursday’s close, leaving outstanding the confirmed breakout’s eventual third higher close minimum requirement.