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 Jun Contract (EC, ETF: (FXE, UUP))
Immediately extending Tuesday’s drop (by closing lower, not by gapping down) has confirmed the breakout from a multi-session range. An eventual third lower close is required before a bottoming effort can be credible.
Gold Jun Contract (GC, ETF: (GLD))
Wednesday’s lower lows were retraced to unchanged, but the bounce limit was lowered to 1295.00. Firming slightly higher after the close at this stage should either give the bounce limit a test on Thursday, or else snap back down to resume the decline.
Silver Jul Contract (SI, ETF: (SLV))
Firming Wednesday morning extended through the close to attack the 16.45 bounce limit. Stopping optimistically short of even filling the 2-week old gap, and now bouncing higher instead of neutralizing the downside attraction, is requiring a substantial rally Thursday, or else a substantial resumption of the decline.
30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday’s gap up was shallow, and retraced back into negative territory, attacking Tuesday’s lows down to 140-28. The breakout was already confirmed, so the pattern still requires an eventual third lower close before bottoming can be credible.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Another day of extremely narrow ranging — not yet extending the entrenched rally — continues to be vulnerable to a deeper corrective detour down before resuming the rally.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Pulling back further Wednesday from Tuesday’s failed gap up didn’t get to 2.80, whose test could have held to form a position of strength ahead of Thursday’s EIA report. But closing back under 2.76 was needed to form a position of weakness, which means that a favorable reaction Thursday can’t be dismissed.
Mid-day Update… Neither here nor there.
Session’s higher highs fill Monday’s gap.
“Nobody eats at that restaurant anymore, it takes too long to get it.” – Yogi Berra
2704.00 was attacked just a half-hour before the open. The noon hour’s high just tested 2727.25. That’s not necessarily strong-handed sponsorship. And if it’s weak-handed, then a reversal back to yesterday’s ~2701.00 lows is likely.
Why is today’s rally not necessarily strong-handed? Earlier, I noted the pre-open defensive posturing. Now the afternoon’s bias-up target has been met during the noon hour, before even being put into play at 1:20. Moves contained to the noon hour can still gain traction by recovering a relevant level, but less so by holding a relevant level’s test. So, the trending probably was sponsored by weak hands.
It’s still a bias-up environment. Exiting it above the bias-up target would suggest that strong-handed buyers have been attracted as reinforcements, anyway. Backing-and-filling during this bias-up environment isn’t very appropriate, and dipping too deeply could trend down through the close.
Look ahead: Economic Calendar – for Thu May 17, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s econ calendar is busy with both high-profile and reliably influential reports. Any noticeable reaction to the pre-open reports is likely to be duplicated in reaction to post-open reports.
WedEX signal
Wed 4:00 PM ET
James Bullard Speaks
Wed 6:30 PM ET
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
E-Commerce Retail Sales
10:00 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*Neel Kashkari Speaks
10:45 AM ET
10-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2721.50 | 2720.75 |
| …would target | 2728.00 | 2727.25 |
| Bias-down: under | 2712.25 | 2711.75 |
| …would target | 2704.00 | 2703.50 |
| 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 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… Digging out slowly.
Rallying into and out of the open.
The overnight blip-up to 2714.75 was ultimately retraced back down to the earlier 2704.50 low.* 
But the open was greeted back up at 2711.00-2712.00 resistance.
Having reacted down from there already, we already knew that simply retesting it during the opening 15 minutes of volatility would be bullish. In fact, a buy signal there immediately triggered at the open, extending up to 2719.50.
Reacting down to 2713.00 and recovering created legs that overlapped the 2716.25 bias-up signal at both 10:15 and 10:30. So, this is a noN-bias environment. The bias-up signal need not define this window’s lower-end, and an offsetting test of the bias-down signal is not in-play.
Trending during a no-bias or noN-bias environment often isn’t sponsored by strong hands. That’s why trending during these environments is done less often. Trending anyway without reversing is also done less often. Trending this morning would more likely be retraced.
Trending this morning may also be reversed. *That pre-open dip back down to 2704.50 was similar to the dip before Europe’s opens — defensive posturing. Like the recovery overnight that was retraced back to the lows, this morning’s recovery may expend its buying pressure satisfying weak-handed buyers, and find no sponsorship to defend against reversing down. We can give the recovery attempt a benefit of the doubt anyway, which could extend up to 2735.50.