S&P
The First Trade & Pre-open Tour Recording… 1987-style.
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…
Tuesday’s gap up extended to 2597.50 before reacting down almost 25 points to 2573.25, and filling the gap back to Monday’s close. The 2687.75 bias-up signal had already failed to trigger, putting into play an offsetting test of its 2566.50 bias-down signal. That didn’t prevent the balance of the morning from rallying to fresh session highs. Its no-bias trending could have been invalidated by exiting the bias environment above its 2601.50 bias-up target. The target held as resistance despite being probed up to 2605.50, so it wasn’t for lack of trying that 2566.50 became “unfinished business below.” That still didn’t prevent extending higher, albeit after another 25-point dip to 2580.00. Late highs attacked 2619.00 and took RSIs simultaneously overbought before reacting down to 2603.25.
Overnight action’s new info…
Another trade war attack by China has retraced yesterday’s rally. Swallowed it whole. Bouncing out of Tuesday’s late pullback had never recovered to retest intraday highs. Price soon began drifting back down and retested the pullback’s 2603.25 low by 3 ticks. Flat-to-lower ranging accelerated its pace into and out of Europe’s opens. Headlines soon triggered a plunge through yesterday’s low to 2569.25. A 2-hour consolidation back up to 2580.00 broke lower to 2559.50. That break has been retraced back up to the consolidation’s “lower prior highs” at 2574.00.
If, then…
Avoiding a repeat of Monday’s plunge on Tuesday probably wasn’t bullish. But it left only a very narrow window for tracking the 1987-style crash template — by trending down sharply Wednesday either without delay or by the morning bias environment exit. Having trended down sharply already overnight, a flat or flat-to-higher morning is possible. But the crash template is fueled by intraday selling, and would require resuming the decline aggressively this afternoon. Regardless of the character or path there, 2509.00-2511.00 remains the next lower objective.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2580.50 would be likely also to exceed the 2585.75 bias-down target through 10:15 to renew the bias-down signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2619.00 | 2620.00 |
| …would target | 2627.00 | 2628.00 |
| Bias-down: under | 2594.00 | 2595.00 |
| …would target | 2584.75 | 2585.75 |
| Signal status: LATE BIAS-DOWN, BIAS-DOWN 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)
Tuesday avoided a repeat of Monday’s plunge. That’s not necessarily bullish, and probably isn’t. But it leaves only a very narrow window for tracking the 1987-style crash template — by trending down sharply Wednesday either without delay or by the morning bias environment exit. Regardless, Tuesday’s bounce is still likely only a temporary correction, likely to resolve down anyway.
Overbought RSIs at Tuesday’s 2618.75 high require a retest. That should include 2620.00 and potentially 2628.00 or 2631.00, while still being only a temporary correction of Monday’s plunge. Meanwhile, “unfinished business below” was left outstanding at 2566.50, which should be tested on the way to resuming Monday’s plunge.
- 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 Mar Contract (EC, ETF: (FXE, UUP))
Monday’s failed bounce extended down deeper Tuesday morning to probe fresh lows. Meanwhile, the required eventual third lower close was fulfilled. But the trend remains down so long as bounces now hold 1.2365.
Gold Jun Contract (GC, ETF: (GLD))
Gapping up and surging Monday was somewhat retraced overnight, but the 1339.00 reversal signal wasn’t probed until mid-morning, and then resisted a bounce into the afternoon. A second consecutive lower close on Wednesday would be optimal confirmation that the decline has resumed.
Silver May Contract (SI, ETF: (SLV))
Pulling back overnight held 16.50 but extended down Tuesday to test the 16.40 sell signal. It was still being overlapped into the afternoon, requiring another decisive close under it Wednesday to trigger.
30-year Treasury Jun Contract (US, ETF: (TLT))
Two eventual higher closes had more than fulfilled the recent confirmed breakout’s minimum requirement, but Tuesday’s open created a gap back up to Monday’s close that will want to be filled eventually, and would meanwhile inhibit a reversal down.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s deeper dip wasn’t immediately recovered Tuesday, but neither did it extend down. The pullback still has room down to 62.62 while awaiting a recovery back above 64.25 that would target 66.88.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Tuesday did not immediately resume Monday morning’s dive and instead bounced to test 2.70 resistance. The downtrending support that was still being tested at Monday’s close wasn’t decisively recovered, but neither did it hold as resistance.
Mid-day Update… What’s the hold-up?
Holding above yesterday’s late high hasn’t extended higher.
The open’s 2588.00-2597.00 range had resolved down to avoid triggering bias-up. Despite putting into play an offsetting test of the 2566.50 bias-down signal, despite probing the pre-10:15 lows, and despite extending down to 2573.50… the balance of the bias environment rallied to fresh highs at 2606.00.
Exiting the bias environment above its 2601.50 bias-up target would have invalidated the no-bias signal and its lower objective. Despite rallying 33 points from low to high, and despite probing fresh highs up to 2606.00, the bias environment lapsed back under 2601.50.
So, 2566.50 is “unfinished business below.” Overbought RSIs at the 2606.00 high require an eventual retest. Perhaps that attraction above is what’s responsible for limiting the noon hour’s pullback to 2584.00. Back under 2590.00 and 2585.00 would start to overwhelm that higher attraction in favor of trending back down.