S&P
The First Trade & Pre-open Tour Recording… Trying to get unstuck.
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…
Monday night’s eventual slide had fulfilled the intraday’s “unfinished business below” at 2721.50. The recovery attempt failed, and Tuesday’s cash session was greeted by a larger and steeper drop to 2712.50 before the open. And that was extended to 2703.25 through the first half-hour. But that was also the end of the downside momentum. No upside momentum replaced it, so several wide swings defined a 11-12 point range that gradually pierced lower and lower lows down to 2700.50. The last half-hour bounced back up to the range’s last relative high at 2711.00-2712.00. It had become too late anyway to recover anything predictive, or to offset that the range had gained no traction either way.
Overnight action’s new info…
Yesterday’s post-open range has largely held overnight, but for a brief probe above it. The Globex open had quickly retraced yesterday’s late surge by 61.8% to 2704.50, but it was eventually recovered back up to 2711.00-2712.00. Dipping to 2707.00 ahead of Europe’s opens was also recovered, and briefly extended to attack 2715.00. That was retraced as quickly back down to retest 2707.00, before recovering again to retest 2711.00-2712.00 — and being a 61.8% retracement of the earlier brief attack on 2715.00, its calculable resistance has pushed price back down to attack 2707.50.
If, then…
One of the instructions from Tuesday’s Market Wrap was that gapping up today above yesterday morning’s 2715.50 high would be credible for bouncing intraday. Both its resistance and its relevance are confirmed by having tested it overnight to within 3 ticks, and then reversing back down 8-1/2 points to that leg’s origin. Retracing that overnight high by 61.8% is calculable resistance, and happens to coincide with the natural resistance of yesterday afternoon’s highs. Their resistance has combined to push price back down sharply, but not yet irrecoverably. Overcoming resistance could rally through the morning. Otherwise, it’s not too late to greet the open back down at yesterday afternoon’s 2701.00 lows to try snapping back up again. But failing to hold the low would be credible for probing fresh lows, to 2695.00-2696.00 and possibly to 2689.00 or 2682.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2707.75 would be unlikely to trigger the 2703.50 bias-down signal at 10:15. Exiting the open under 2711.75 would be unlikely to trigger the 2716.25 bias-up signal. Exiting the open above 2713.50 would actually be likely to also trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2717.50 | 2716.25 |
| …would target | 2724.25 | 2723.00 |
| Bias-down: under | 2704.50 | 2703.50 |
| …would target | 2696.75 | 2695.75 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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)
Tuesday’s action developed overnight, and then through the open, and then it stopped. “Unfinished business below” at 2721.50 was neutralized by fresh lows before Europe’s opens. (Before, i.e. defensive posturing.) Another drop, larger and steeper, fell to 2712.50 before the open. And that was extended to 2703.25 through the first half-hour.
That’s a lot of momentum, a lot of ground covered, and a lot of supports broken. But that was also the end of the downside momentum. No upside momentum replaced it, so several wide swings defined a 11-12 point range that gradually pierced lower and lower lows down to 2700.50.
The last half-hour’s bounce to 2711.00-2712.00 ended at the range’s last relative high. It had become too late anyway to recover anything predictive, or to offset that the range had gained no traction either way.
Gapping down under the afternoon’s 2701.00 low would be credible for probing fresh lows, to 2695.00-2696.00 and possibly to 2689.00 or 2682.00. Gapping up above the morning’s 2715.50 high would be credible for bouncing intraday.
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))
The bottoming opportunity followed Gold’s plunge to fail holding its 1.1960 and 1.1890 pullback limits. The gap down was above prior lows so an immediate recovery wouldn’t be problematic, so we’ll continue monitoring for a potential bottom.
Gold Jun Contract (GC, ETF: (GLD))
Already trending down under 1316.00 after Monday’s close, and extending down sharply overnight, Tuesday gapped down under all prior lows and extended much deeper to fulfill the outstanding 1294.00 objective The trend remains down so long as bounces now hold 1298.50 as resistance.
Silver Jul Contract (SI, ETF: (SLV))
Closing Monday in a test of the 16.65 pullback limit had avoided signaling the corrective bounce was done. But it was done nonetheless, extending down much deeper overnight into Tuesday. Not to fresh lows — in fact, stopping optimistically short of filling the two week-old gap back down to the 16.15 low close. The trend remains down so long as bounces now hold 16.55.
30-year Treasury Jun Contract (US, ETF: (TLT))
There was no reason to further delay breaking lower Monday if that were the pattern’s objective. It did, and despite bouncing to 143-19, Tuesday’s open was greeted by gapping down and extending down to fresh lows at 141-01. That is a second consecutive lower close from a multi-session range, confirming its breakout and now requiring an eventual third lower close.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
More narrow ranging in both positive and negative territory Tuesday continue delaying the rally’s resumption to its 74.10 objective. But it also entrenches the uptrend and creates a position of strength that the pattern often exploits when trending slows without being rejected.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Probing a fresh recovery high Tuesday pierced the two-week old 2.44 high up to 2.85 whose recovery would start to signal a bigger rally underway. The balance of the session fluctuated narrowly around unchanged, back into negative territory. Meanwhile, the decline remains vulnerable to resuming on a close under 2.78.
Mid-day Update… Hanging out, by a thread.
Open’s drop is getting a little too comfortable.
Already testing 2712.00 before the open — well under this morning’s 2724.00 and 2718.00 bias-down parameters — had expended a lot of energy. But it apparently earned follow-through, and post-open reinforcements pushed lower to 2703.25.
That was the first half-hour. The balance of the session has ranged sideways. The first reaction up exceeded its 2714.00 target by nearly 2 points before reversing back to the open’s low. The next reaction up attacked 2713.00, and blipped-up even higher momentarily as the noon hour was ending. But now the 2703.00 is being attacked again.
The constant support and descending resistance forms a Descending Triangle, except that it doesn’t — I don’t begin my patterns at gaps open. But the pattern isn’t accumulative. And while a recovery today is possible, it won’t be credible from under 2714.00, unless a probe of fresh lows is rejected first.