S&P
Post-open Review… In the slop.
Relief rally isn’t being rejected. Nor extended.
Last night’s 2672.50-2677.50 open had retraced before Europe’s opens down to 2660.50. It was all recovered before the open up to 2678.75. Actually opening back under the earlier 2677.50 high began another retracement, this time down to 2666.00 before bouncing.
Very gradually, the post-open dip has been recovered to the 2676.25 opening print. The 2672.75 bias-up target wasn’t recovered in time to renew the bias-up signal, but this is still a bias-up environment. A retest of Friday’s 2680.50 opening high is likely, up to 2681.50.
Back under 2671.50 would start to signal the range is resolving down. A downleg prior to probing last week’s highs wouldn’t likely gain much momentum. But reacting down from fresh highs could find a massive rubber band stretch being snapped back.
The First Trade & Pre-open Tour Recording… Weekend pass.
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 rally had peaked at Friday’s opening bar, 1 tick short of its 2680.75 bias-up target. Reversing down under its 2672.00 bias-up signal had put into play only a test of its 2654.00 objective — which was fulfilled at the morning’s 2651.00 low — but its 2648.25 bias-down target was met anyway during the afternoon’s drop. Despite getting sucked into the air pocket under Thursday’s range down to 2645.00, the close recovered back above 2654.00, like the morning, and prevented signaling a “hold-short.
Overnight action’s new info…
Bombing Syria during the week would have likely sent the market down sharply. Waiting until after Friday’s close at least allowed the weekend to pass, a weekend without retaliation. Sunday night’s open gapped up in relief to and through 2672.00 and extended to 2677.50. Reversing down to test 2661.00 stopped 3-4 points short of Friday’s close, which was close enough for Europe’s opens. Much of the reversal was retraced to 2675.00, which is being consolidated down to 2672.00, including a temporary blip-down to 2670.00.
If, then…
Is the overnight rally’s catalyst any more relief that Friday’s salvo may go unanswered? A steady flow of negative news items other than Syria were absorbed last week, so an actual positive development could be a very bullish catalyst. Only closing above 2672.00 would have been bullish last week before probing above it. Extending above Friday’s 2680.50 high could be bullish if maintained through a relevant timing window. But probing last week’s highs and closing back under 2672.00 could be more bearish this week than last week.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2668.00 would be likely at least to trigger the 2664.50 bias-up signal at 10:15. Exiting the open above 2675.00 would be likely also to exceed the 2672.75 bias-up target through 10:15 to renew the bias-up signal.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2664.75 | 2664.50 |
| …would target | 2672.75 | 2672.75 |
| Bias-down: under | 2650.75 | 2650.75 |
| …would target | 2642.75 | 2642.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
Friday morning’s test of its 2654.00 objective was isolated during the bias environment. That made it difficult if not also unlikely to be broken. The next timing window capable of breaking it would be the final hour. So, after bouncing to 2668.00, the proxy window’s probe of fresh session lows had the opportunity to break lower. Despite testing 2645.00, the last half-hour bounced back above 2654.00 to 2659.00.
Closing under 2654.00 would have qualified as a hold-short, even over the weekend. The air pocket under Thursday’s lows had been probed down to the structure containing Wednesday’s close. The next probe lower should find another air pocket with only obligatory support at 2620.00, 2604.00 and maybe 2584.00. Then lower.
There’s also a path higher. Considering the steady flow of negative news items being absorbed, a positive development could be a very bullish catalyst. We’ll discuss that during the Saturday Review.
Details and other markets coverage are discussed in the post-market Wrap recording here.
THE LINK TO THIS WEEKEND’S 9:30am ET SATURDAY REVIEW WILL BE SENT IN THE MORNING.
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 Mar Contract (EC, ETF: (FXE, UUP))
Friday was still overlapping 1.2390 like Thursday, and also ranging narrowly around it, ultimately flat-to-higher, keeping alive the likelihood that Thursday’s gap down was only a temporary pullback.
Gold Jun Contract (GC, ETF: (GLD))
The 1339.00 test had tried extending down after Thursday’s close and before Friday’s open but still reacted back up above 1344.00 Friday morning, also testing the 1347.25 buy signal. Extending higher would target 1361.00-1364.00.
Silver May Contract (SI, ETF: (SLV))
Repeated efforts after Thursday’s close to extend down under 16.50 failed, allowing Friday morning to bounce back up above 16.60. Extending higher would target a retest of 16.80.
30-year Treasury Jun Contract (US, ETF: (TLT))
The corrective bounce potential from Thursday’s test of 145-02 was not very pronounced Friday, but at least the pullback has paused if not ended. Extending higher would target 146-10 before a bigger downleg becomes likely.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Multiple days of hovering narrowly around the 66.88 had already indicated the intent to probe higher, next targeting 69.50. Firming into the weekend may be the breakout that starts the next upleg.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Ongoing ranging between 2.65-2.70 finally resolved Friday, but it wasn’t down to retest the decline’s 2.62 target or lower. Friday gapped up and extended to test 2.75, whose recovery could marginalize sellers. I’m suspicious of that, since the gap back to Thursday’s close would want to be filled. Also, the first breakout attempt from an extended narrow range tends to be false.