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))
Tuesday night’s fresh trend low was only slightly lower, and it wasn’t repeated intraday. But only Tuesday’s highs were attacked Wednesday, without recovering to signal momentum reversing up. Regardless, a more credible bottom would first recover an intraday test of Tuesday night’s 1.1855 low.
Gold Jun Contract (GC, ETF: (GLD))
Still fluctuating Wednesday is not necessarily bullish while continuing to hold the 1316.00 bounce limit. But the ongoing fluctuation is also further delaying a resolution down, for which there’s no bullish reason to further delay.
Silver Jul Contract (SI, ETF: (SLV))
Fresh recovery highs were probed Wednesday but not maintained, keeping alive the recent bounce as being only a temporary correction, still likely to resolve down and resume the decline.
30-year Treasury Jun Contract (US, ETF: (TLT))
Attempting to trigger the 143-07 sell signal on Friday had required there be little or no delay. Lower lows and lower highs since then kept alive its ongoing test, but Wednesday’s gap down under those tests now all but requires extending down. Any recovery would start to make a new upleg likelier.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s intraday test of 68.25 that recovered above the 68.65 buy signal was immediately productive overnight, probing fresh highs up to 71.35 Wednesday.The 74.10 objective remains in-play, within pullbacks now needing to hold 69.50 as support.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up slightly and ranging sideways Wednesday is still another version of the recent directionless sessions that are not individually undermining the continuing likelihood to resolve down. Collectively, not exploiting the opportunity on a timely basis can become bullish again.
Mid-day Update… Optimism finds a hole.
Noon hour rally extending sharply higher.
The first hour’s multiple wide swings weren’t offering much information to its ultimate resolution, or it was offering plenty of contradictory information. 
But we knew its ultimate resolution would be substantial. In fact, dipping to test the 2674.00 bias-up signal down to 2672.00 during the bias-up environment created a slingshot effect that resumed the overnight rally.
But that’s not substantial. This is:
The noon hour’s entry was soon retesting Monday’s highs up to 2684.25. Not much later at all, attacking the morning’s 2681.00 bias-up target and then the afternoon’s 2688.75 bias-up target. The afternoon’s 2693.00 renewed bias-up target was part of a consolidation, but it has resolved up to the next higher objective above 2684.25, which is 2696.75.
1-minute RSI is diverging negatively, while overbought 3-minute RSI is at least no longer persistently overbought. Nothing requires extending higher. Reacting down a little could mean reacting down a lot, especially back under 2693.00. Not reacting down at all could mean extending a lot, with the next higher objective being 2721.50.
Look ahead: Economic Calendar – for Thu May 10, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s BOE decision finds a currency well extended in its decline, but having recently defended prior sessions’ lows. Whether that’s a bottom, or “ineffectual optimism,” will soon be known. Meanwhile, CPI is both high-profile and reliable for influencing price action. And any noticeable price reaction will likely be duplicated by post-open reports. The 30-year auction can inhibit volatility during the noon hour, but there’s often a relief rally.
*Bank of England policy statement
7:00 AM ET
*Consumer Price Index
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Treasury Budget
2:00 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 | 2683.50 | 2681.75 |
| …would target | 2690.00 | 2688.25 |
| Bias-down: under | 2672.75 | 2671.00 |
| …would target | 2664.75 | 2663.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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… Contained optimism.
Pre-open pullback holds resistance… and support.
Reacting down from the overnight test of 2684.25 isn’t surprising, since it’s the next higher objective, or the room for noise above 2674.00 and 2681.00. Reacting back down to 2677.00 isn’t surprising either, since it’s the open’s preliminary level.
Surprising, or unusual, is that the first hour has essentially produced six 5-6 point swings, each overlapping 2677.00 and the 2681.00 bias-up target — three of the swings during the opening 15 minutes of volatility. And still no resolution.
The 2674.00 bias-up signal did trigger. But its 2681.00 bias-up target is already met. Often. It’s still a bias-up environment that could break higher anyway. But meanwhile fresh lows should be limited to testing 2674.00 as support during this window.
I had assumed during the Market Tour that hesitating to test 2684.25 would at least reflect restrained optimism, potentially bullish from a contrarian perspective. New information arrived later, that the reaction down was back under Monday’s 2681.50 prior high. Monday’s prior high, not yesterday, but the Isolation setup still forms by remaining under the prior high.
So, the opening range has formed a position of weakness. It’s able to launch a probe of fresh highs, e.g. 2684.25. But from a position of weakness that would be doomed failure. And there’s no “unfinished business above,” so a break lower is possible at any time.