S&P
Market Wrap (recording & summary)
It was a wide range, but a range nonetheless. Tuesday developed almost entirely above Monday’s 2716.25 cash session close, resisted by the 2726-2727 target created by Monday’s close above 2711.50. The morning’s bias left “unfinished business below,” an offsetting test of its 2710.25 bias-down signal. No matter how skeptical we were that it would be tested, and no matter how true that has been, it is an attraction that will need to be tested eventually.
So, was Tuesday’s go-nowhere strength only “ineffectual optimism” ahead of Wednesday’s FOMC events? Possibly, but not enough of it to be very bearish from a contrarian perspective. Overnight and/or morning fluctuations may try to trend beyond either end of Tuesday’s range but probably won’t. In contrast, volatility after the policy statement and during Fed Chair Powell’s first quarterly Q&A could be off the charts — (almost) literally.
PROGRAMMING NOTE: I’LL BE AWAY FROM THE SCREENS BETWEEN 11:15-1:45 ET WEDNESDAY.
- 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))
[Rolling coverage forward to Jun which trades at a 90-pip discount from Mar ]… Monday’s bounce back up to 1.2445 “higher prior lows” held, which Tuesday’s gap down exploited by opening at Friday’s 1.2370 close. Extending down to fresh lows through the day essentially confirms the trend remains down.
Gold Apr Contract (jUN , ETF: (GLD))
Monday’s bounce was too shallow to invalidate Friday’s break, which Tuesday morning exploited by trending down under Friday’s lows. Prior lows down to 1305.00 may still offer support, but it should be just a formality to signal 1291.50 is in-play.
Silver May Contract (SI, ETF: (SLV))
Monday’s bounce was too shallow to invalidate Friday’s break, which Tuesday morning exploited by trending down under Friday’s lows. The nearest bounce limit can be lowered from 16.40 to 16.35.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday’s gap down to 144-00 support was recovered to probe positive territory, but closed essentially flat. Tuesday’s gap down to Monday’s 143-26 open ranged sideways narrowly. The rally has little excuse to further delay resuming, and to avoid extending the pullback down to 143-16.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to May which trades at a 55-cent discount from Apr]… Monday’s intraday dip to “lower prior highs” at 60.70 was recovered to close just under the 61.85 buy signal. Tuesday’s open surged through it and extended to prior highs 62.80. A second consecutive higher close Wednesday would confirm 65.00 is in-play.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Monday’s break under 2.70 support was recovered into Tuesday’s open, hardly fulfilling the minimum 2.65 downside objective, let alone attacking it. But it remains in-play and outstanding, nonetheless.
Mid-day Update… Holding up, and holding out.
Still hovering around yesterday afternoon’s highs.
Skepticism about this morning’s downside was proved out by the complete retracement from 2716.25 back up to within 1 tick of the open’s 2727.75 high. But that happened too late to affect the bias signal, and didn’t change that an offsetting test of its 2710.25 bias-down signal had been put into play.
The balance of the morning reacted down to fresh lows before bouncing 10 points into the noon hour. Now that has been retraced entirely to within 1 tick of this morning’s 2713.50 low.
This is a no-bias environment, so fresh lows would be inhibited from getting very far for another half-hour. A deeper drop that waits until then, or that bounces back to the bias signal, would be more reliable for extending. Recovering 2720.00 would start to signal more upside, regardless of whether the downside attraction had been fulfilled.
Look ahead: Economic Calendar – for Wed Mar 21, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wondering why Fed speakers have been in hiding recently? Here comes the FOMC policy statement. And it’s a quarterly meeting, so the new Fed Chair will host his first Q&A. These can trigger more volatility and wide ranges than the policy statement release, itself.
MBA Mortgage Applications
7:00 AM ET
Current Account
8:30 AM ET
Existing Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Meeting Announcement
2:00 PM ET
FOMC Forecasts
2:00 PM ET
*Fed Chair Press Conference
2:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2718.75 | 2720.00 |
| …would target | 2723.00 | 2726.00 |
| Bias-down: under | 2710.00 | 2713.00 |
| …would target | 2702.75 | 2706.00 |
| Signal status: NO-BIAS | 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.