S&P
Post-open Review… Every which way but loose.
Incredibly choppy open finally resolves.
The overnight recovery from its early 2645.50 low made it back up to 2686.50 before the open. That was already slipping to greet the open at 2681.00. 
Collapsing through the open extended down to 2663.00. Then things got volatile.
How does a 30-minute, 23-point drop THEN get volatile? By bouncing back-and-forth within a narrowing 14-point range. By invoking the grace period at its 2674.00 bias-down signal. By confirming a late bias-down at fresh lows by 10:30.
Incredibly choppy. But ultimately down. And as tends to be the case with this pattern of polarized strong opinion fighting aggressively in either direction, no time has been wasted in extending to the objective. Late bias-down triggered at 10:30, its fresh low at the same time offered confirmation, and its 2651.00 bias-down target is met less than 25 minutes later.
The objective was probed to also test the overnight low, which itself is a test of 2645.50. Its test is producing a bounce of almost 14 points, violating the current bounce limit. Oversold RSIs at the low require its eventual retest. Resuming the decline would next target 2633.00, and potentially lead to 2509-2511.
The First Trade & Pre-open Tour Recording… Ineffectual pessimism?
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Market Tour <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Wednesday morning’s 40-point rally from 2687 both triggered and fulfilled its 2707 and 2722 bias-up parameters up to 2727. And it was almost all retraced through the noon hour. The opening print was ultimately touched upon e\Exiting the afternoon bias environment’s wide 20-point range. Rather than break lower to form a Wreversal Wednesday, yet another bounce probed the upper-end of the afternoon’s wide range up to 2710. The 3:37 position-squaring window started retracing the last bounce, no differently than the choppy afternoon’s two prior bounces. The 2687 open was being attacked to within a point 3 minutes of the cash session close. Those next 3 minutes continued dropping at the same steep pace down to 2679, which extended to 2667 into the futures settlement. That first probe under the opening print was 20 points under it.
Overnight action’s new info…
The late drop had not slowed its pace through Wednesday’s closes. The pace barely slowed as the drop extended through the Globex open, eventually touching Monday’s 2645.50 cash session close equivalent. Its relevance persisted as its support has served as the overnight low. Rallying through Europe’s opens touched yesterday’s 2679 cash session close equivalent before reversing back down to 2657.
If, then…
The most bullish element is the very late origin of Wednesday’s last downleg, so its sponsorship may be weak-handed and more easily rejected. This is further suggested, not actually signaled, by already retracing the post-close and overnight follow-through back up to yesterday’s cash session close. But it’s not enough for a reversal signal to only retrace the last relevant level, which is yesterday’s cash session close equivalent. That may just be noise. The prior relevant level must also be recovered to indicate stronger-handed sponsorship, which this morning is at least the bias-up signal. Meanwhile, the most bearish element is that two consecutive sessions have probed back above December’s prior highs intraday but failed to close higher — to an increasing degree, both in probing above and rejecting below. The same principle applied to Tuesday’s bottoming pattern, which followed the expanding weakness through Friday and Monday. Similar to that setup, not gapping up above yesterday’s lows to try isolating the overnight drop would be vulnerable to extending the drop. And the next lower objective would be a retest of Monday night’s low down to 2509-2511.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2679 would be unlikely to trigger the 2674 bias-down signal at 10:15. Exiting the open under 2665 would be likely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2708.50 | 2706.00 |
| …would target | 2721.25 | 2718.75 |
| Bias-down: under | 2676.50 | 2674.00 |
| …would target | 2653.50 | 2651.00 |
| Signal status: LATE BIAS-DOWN | FAQ | |
| NEW! Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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 night’s ranging had resolved up almost immediately from the 2687 open. The morning’s 41-point post-open rally triggered bias-up, and fulfilled its 2722 bias-up 
target when nearly touching 2727.
Then things changed.
Dipping into the noon hour extended down through the afternoon bias environment entry. That stopped optimistically short of touching the open’s low. Potential for a Wreversal Wednesday lapsed as the balance of the afternoon ranged choppily sideways. More so, the last half-hour was entered by a retest of the afternoon range’s upper-end up to 2710.
Then things changed, again. A lot.
The 3:37 position-squaring window started retracing the afternoon’s last bounce, and then some. The afternoon range’s lows were attacked down to 2688 within 3 minutes of the 2679 cash session close. That 31-point drop extended to 43 points into the 2667 futures settle. The “narrow” ranging at Tuesday night’s 2660 low was retraced by 61.8%. (And 2663 is being touched minutes later.)
Two consecutive sessions have probed back above December’s prior highs. Both failed to close higher, and one attempt was significantly higher before failing by a lot. The most bullish element is the very late origin of Wednesday’s last downleg, so its sponsorship may be weak-handed and more easily rejected. But if Thursday’s open isn’t gapping up to resume the recovery, then it’s probably gapping down and targeting a retest of Monday night’s low down to 2509-2511.
- 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 down Wednesday immediately filled the gap back down to Tuesday’s 1.2366 open. Rather than bounce to form a low, the balance of the morning trended down relentlessly to probe 3-week old “lower prior highs” down to 1.2270. A second consecutive close Thursday under 1.2725-1.2730 would be difficult to recover before probing sharply lower.
Gold Apr Contract (GC, ETF: (GLD))
Not recovering Tuesday’s reversal session almost immediately Wednesday had made the pattern likelier to extend down intraday. Its fresh lows at 1313.50 touched January’s low, suggesting that the hesitation here is only obligatory and likely to resolve down. Closing under 1312.50 would next target 1291.50.
Silver Mar Contract (SI, ETF: (SLV))
Already being well out of proximity to recover at least 16.95, Tuesday’s intraday reversal was likely to extend Wednesday. Closing under 16.40 is next targeting 16.15.
30-year Treasury Mar Contract (US, ETF: (TLT))
Relatively narrow ranging overnight gave way through Wednesday morning to attack Monday’s 144-12 low down to at least 144-17.
A new low close is still required.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s sideways ranging, instead of a recovering 64.20, made any new weakness likely to test 61.50. Wednesday morning’s slide probed it during the noon hour down to 61.25. The pattern can’t tolerate much delay in reversing up to reinstate the 67.15 target.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Flat-to-lower ranging Wednesday fluctuated around Tuesday’s 2.69 low, still not attacking the 2.86 buy signal but also not extending down.