S&P
Post-open Review… Second wind.
Overnight rally finally extends… to resistance.
Gapping up at the 2620.00 bias-up signal reacted down to attack 2613.00 through much of the opening 15 minutes of volatility. 
That was still above Friday’s highs, and it only stretched the rubber band, which snapped back up. Overnight highs were probed by a point up to 2629.00.
Reacting down into the 10:15 bias timing window attacked the 2620.00 bias-up signal as support. But bias-up triggered cleanly. Trending back up through the bottom of the hour probed the 2630.50 bias-up target up to 2635.25.
That’s testing Friday afternoon’s 2634.25 high. Gapping up above it would have been credible for triggering a session-long rally setup. Now it’s just resistance. In fact, RSIs just diverged negatively into its retest. Back under 2630.75 would now be likely to test 2627.50.
None of which prevents extending higher anyway. A fresh high could trigger another short-squeeze through the top of the hout. But back under 2627.50 would start to signal that this morning’s rally was unwinding, at least likely to fill the gap back down to Friday’s 2604.00 close.
The First Trade & Pre-open Tour Recording… Morning stretch.
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…
Friday’s session was preceded by an overnight drop, and the open was greeted in recovery mode. That was nothing new for the week, not until the recovery failed, miserably. Thursday night had initially plunged 40 points on China tariffs news from its 2662.25 intraday close. That was retraced only to 2648.00 pre-open, and then almost to 2657.00 through the open. The balance of the morning reversed back down to within 5 points of the 2620.00 overnight lows. The flat-to-lower noon hour resolved down sharply to 2584.50 — down 78 points from Thursday’s close. The final hour bounced to 2611.00. No “unfinished business above” was left outstanding, having rejected the Wednesday-Thursday test of 2644.00 and 2660.00.
Overnight action’s new info…
Sunday night’s gap up immediately recovered Friday’s last-minute reaction down from 2611.00. The gap up extended higher to test 2625.00 by midnight. Narrow ranging into Europe’s opens blipped down to attack 2615.00, then blipped-up to attack and test 2628.00. But its reaction down is now attacking 2618.00.
If, then…
The relentless overnight rally is relative shallow, and still contained by the range of Friday afternoon’s collapse. It has gotten into position for more easily recovering a relevant level — like Friday afternoon’s 2634.00 bias environment high — which would be bullish if recovered through the open. Meanwhile, however, the likely alternative to extending higher is not only to retesting Friday’s low but trending through it.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2612.00 would be unlikely to trigger the 2620.00 bias-up signal at 10:15. Exiting the open above 2621.50 would be likely to trigger bias-up.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2621.50 | 2620.00 |
| …would target | 2632.00 | 2630.50 |
| Bias-down: under | 2594.00 | 2592.50 |
| …would target | 2581.25 | 2580.00 |
| Signal status: BIAS-UP | 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 afternoon’s 50-point plunge exceeded the overnight 40-plunge. That had been triggered by the evening announcement of $100m more in tariffs against China. The afternoon plunge was triggered by the impending weekend illiquidity. The pattern’s resolution down continues to be likeliest.
There is no “unfinished business above,” and resuming the decline could target another 30 points lower and attack prior lows. And there’s no bullish reason to attack prior lows. With sellers having gained traction Friday afternoon, gapping up more than 30 points Monday may be the only way to avoid extending the decline.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- I’LL SEND THE LINK TO SATURDAY REVIEW EARLY 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))
A slightly lower low overnight was retraced into Friday’s Employment Situation report, where Friday morning extended back up above Thursday’s highs. Consolidating pessimistically short of the gap back to Wednesday’s 1.2350 gap is potentially bullish from a contarian perspective.
Gold Jun Contract (GC, ETF: (GLD))
Probing fresh lows overnight under 1323.00 was reversed up Friday morning to test 1339.00 resistance. Holding its test instead of being recovered to reverse momentum up does soften the bullishness of having held the earlier test of support.
Silver May Contract (SI, ETF: (SLV))
Initially extending Thursday’s bounce up to 16.50 Friday morning, the pattern reacted back down under 16.50 to maintain the recent break’s momentum. But the pattern can’t tolerate much if any further delay in confirming fresh lows.
30-year Treasury Jun Contract (US, ETF: (TLT))
This week’s pullback to the 145-00 area had essentially dipped as deeply as possible without reversing momentum down. From that perspective, bouncing up to 146-00 seems a little shallow for the reaction to Friday’s Employment Situation report. The gap back up to Monday’s 146-26 close is still in-play.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday still failed to extend above the gap back to Tuesday’s 63.45 close, remaining vulnerable to reversing back down. Friday did reverse back down, retesting Wednesday’s 62.10 low. Closing under 62.62 won’t tolerate much if any further delay in resuming the rally through 64.25 to reinstate the 66.88 target.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Friday’s bounce back up to 2.70 is much too shallow to reverse momentum up, and keeps alive the ongoing pullback targeting a retest of 2.62 down to 2.52.