S&P
Market Wrap (recording & summary)
Compared to how April came in, March went out like a lamb. The Dow was off 840 points at its low. There was no hint of the day’s intent until the opening 15 minutes of volatility had lapsed. And then there was no denying it. Only one bearish scenario was likely for the day, compared to two bullish scenarios. And the bearish scenario was only very bearish. But its objective to retrace recent lows didn’t require being fulfilled intraday, yet it was.
Last week’s 2796.00-2698.00 lows had only temporarily avoided retesting the prior Friday’s 2585.00 low. And the 2585.00 low’s retest of Feb 5’s pivotal low had all but required new lows down to 2509.00-2511.00. All were put into play by Monday’s dominoes, which remained toppled at the close. In fact, a late bounce only touched 2585.00 when recovering it could have undermined near-term momentum.
Now as important as any price is price behavior. A second consecutive intraday plunge on Tuesday would realign the 1987-style crash pattern. Not optimally — that timing has passed — but the template would allow a break under 2509.00-2511.00.
- 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))
Gapping up Monday was retraced entirely to fill the bap back down to Thursday’s 1.2375 low close and to test Thursday’s 1.2350 intraday low. There’s already a confirmed breakout, requiring at least an eventual third lower close.
Gold Jun Contract (GC, ETF: (GLD))
Sunday night’s rally eventually did extend enough for its gap up to 1339.00 and intraday rally to fill the gap back up to last Tuesday’s 1349.50 close. Back under 1339.00 would resume the decline.
Silver May Contract (SI, ETF: (SLV))
Gapping up to 16.40 and probing above it Monday extended through 16.50-16.55 to leave another gap outstanding back down to Thursday’s 16.27 close. Back under 16.40 would put it back into play.
30-year Treasury Jun Contract (US, ETF: (TLT))
An overnight dip greeted the open testing the 146-02 pullback limit, but only briefly before reversing back up and extending to fresh highs testing 147-00. Extending to 147-18 no requires pullbacks to hold 146-08 as support.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s recovery filled the gap back up to last Tuesday’s 65.25 close, which Monday’s open exploited by reversing down sharply through the 64.64 pullback limit to 62.95. And there’s room down to 62.62 before suggesting a deeper detour from the 66.88 objective is underway.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping up above the 2.70 bounce limit Thursday wasn’t a buy signal, and kept the door open to resuming the decline if done aggressively. Monday’s open plunged down to 2.68 and 2.65, closing at or under downtrending resistance to to suggest the decline has resumed, targeting fresh lows at 2.52.
Mid-day Update… Snowballing.
Corrective bounce opportunity fails.
Just for having tested Feb 5’s pivotal low last Friday, an eventual test of the actual low has been required. Ranging sideways for several days didn’t change that, and Thursday’s interim bounce never gained traction. Last night’s relatively shallow range did not in itself suggest fresh lows were any nearer.
But the open resolved down quickly. And the morning extended down sharply. Sharply, and substantially. Now the noon hour’s fresh low is being probed, after finally bouncing for the first time today. No-bias triggered, and was then invalidated after being probed through 1:30.
Which is the most interesting aspect to today’s drop. Beginning from much higher at 2632.00 — still 10 points under Thursday’s cash session close — dropping almost 60 points firmed into the noon hour. A fresh low during the noon hour recovered from under 2579.00. Now a fresh low after triggering no-bias has tested 2567.00. Isolated probes, when the bias-down failed to trigger, are vulnerable to being trapped in a short-squeeze.
There’s still a lot of room to recover before signaling momentum reversing up. Back above 2580.00-2583.00 during the bias environment could end the day much higher. But trying too late to recover would only trap longs for another downleg with 2509.00-2511.00 still the next lower objective.
Look ahead: Economic Calendar – for Tue Apr 3, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: This week’s calendar gets busier after Tuesday, leading into monthly payrolls. Meanwhile, there’s one low-profile and low-impact econ report, and one high-profile low-impact Fed speaker.
Neel Kashkari Speaks
MON 6:00 PM ET
Redbook
8:55 AM ET
*Neel Kashkari Speaks
9:30 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2588.25 | 2589.50 |
| …would target | 2600.50 | 2601.50 |
| Bias-down: under | 2570.25 | 2571.25 |
| …would target | 2555.25 | 2556.50 |
| Signal status: INVALIDATED NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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.