S&P
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 1.1905 61.8% retracement of the drop from Wednesday’s high was retested Tuesday morning and probed into the afternoon, attacking the 1.1930 sell signal that must hold to maintain the decline’s momentum.
Gold Feb Contract (GC, ETF: (GLD))
Probing Monday’s highs overnight up to 1268.50 had disappeared by Tuesday’s open, and the morning dipped down to 1262.50, not rejecting what is already a confirmed reversal next targeting 1283.50.
Silver Mar Contract (SI, ETF: (SLV))
Firming overnight above Monday’s highs was mostly retraced before Tuesday’s open, and then reversed into negative territory through the morning, but was recovered to unchanged.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday’s 61.8% retracement of the rally from last week’s 152-05 low had room for noise down to 152-22, but Tuesday’s open spiked through it on the way to fresh lows at 151-12. Closing above 151-16 keeps alive the potential that the two-day drop has been a temporary correction, a pattern that would also require recovering 152-18.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming again Tuesday avoided re-triggering the 56.85 sell signal while still testing the 57.45 bounce limit. Closing beyond either remains likely to extend in that direction, with the downside potentially limited to 55.50.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Closing Monday above 2.71 is a position of strength that makes a recovery likely from dipping to fill the gap back down to Friday’s 2.61 close. Extending higher first would make the recovery temporary.
Mid-day Update… Get out the vote.
Another final final stage approaching as House vote nears.
Simply for having returned down to 2692.50, a test of 2688.00 was likely. That was regardless of peaking 1 tick short of touching this morning’s 2697.75 bias-up signal, which would have put into play a test of 2688.75.
2688.00 was the morning bias environment’s low. Exiting the bias environment back above 2692.50 would have indicated the pullback had ended. 
But a buy signal at 2691.25 was only touched and not triggered, as new lows into the noon hour tested 2685.50.
2685.25 is this afternoon’s bias-down signal. Testing it to within 1 tick or piercing it first isn’t as relevant as the morning’s similar attack on its bias-up signal. Afternoon bias setups don’t include the consequence of an offsetting test. But it still defines the bias environment’s extreme. And its reaction is testing and retesting 2690.00.
Back above 2691.25 would still signal momentum reversing up. Back under 2687.00 would make fresh lows likely, potentially to 2682.50, but likely to recover if probed during the no-bias environment. And recovering might need that — for the rubber band to be stretched down so it can snap back up — since bouncing out of the noon hour’s low hasn’t yet reversed the trend up.
Look ahead: Economic Calendar – for Wed Dec 20, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s thin calendar has no high-profile or influential reports, although the post-open Home Sales could be influential if it diverges from Tuesday’s Housing Starts data.
MBA Mortgage Applications
7:00 AM ET
Existing Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2689.25 | 2692.50 |
| …would target | 2694.75 | 2697.75 |
| Bias-down: under | 2682.25 | 2685.25 |
| …would target | 2676.00 | 2679.25 |
| Signal status: NO-BIAS | FAQ | |
| NEW! 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.
Post-open Review… Cautionary tail risk.
Warning shot across the open’s bow.
If you’ve only caught every other blog post lately, or even every third, or fourth, then you still probably know my criticism of this leg of the rally. That is, ongoing optimism ahead of today’s tax reform vote(s).
Finally, some semblance of defensive posturing arrived at the open. Pre-open action had twice touched yesterday morning’s 2698.00 high. It was never pierced, and the 2697.25 opening print added only a single tick, only a single tick short of touching this morning’s 2697.75 bias-up signal, before collapsing to 2690.00.
Triggering no-bias after touching the bias-up signal would have put into play an offsetting test of the 2688.75 bias-down signal. One wasn’t touched, so the other isn’t required. Regardless, a lower low has now attacked 2688.75 to within 3 ticks, so it wouldn’t become unfinished business, anyway. Also, simply returning down to 2692.50 already makes 2688.00‘s test likely.
So, fresh session lows remain likely so long as 2693.25 isn’t recovered. I’ll also anticipate a test of 2688.00 to recover 2292.50 through whatever timing window it’s tested, or else a more substantial downdraft may be underway already. And back above 2695.50 would signal that a probe of fresh highs is underway targeting 2699.75-2700.75 or 2703.00.