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 Dec Contract (EC, ETF: (FXE, UUP))
Monday’s bounce had held 1.1815 resistance and closed back at 1.1790 support to prevent the bounce from gaining traction. Which Tuesday exploited by gapping down and extending lower intraday to fresh multi-week lows attacking 1.1710.
Gold Feb Contract (GC, ETF: (GLD))
Post-close weakness could hardly wait to extend lower Tuesday morning to test 1238.50. Closing back above 1251.00 would now signal the trend reversing up, but it meanwhile remains down in an ongoing series of lower lows and lower highs.
Silver Mar Contract (SI, ETF: (SLV))
Already having tested the 15.65-15.70 area overnight last week would have sufficed as a low, but it was retested anyway Tuesday, and slightly lower. Closing back above 15.80 and 15.90 would now signal the trend reversing up.
30-year Treasury Dec Contract (US, ETF: (TLT))
Monday’s failed test of 153-10 had been reversed to almost fill the gap back down to Friday’s close. Overnight weakness extended lower Tuesday morning to briefly probe almost a half-point under last week’s 152-20 low. Wedneday’s FOMC statement isn’t being greeted from the position of strength that would have formed by recovering Monday morning’s high, but a negative reaction is even less assured.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing higher overnight and gapping up Tuesday was just short of prior highs around 59.00. That pessimism wasn’t constructive, as it price immediately began reversing down for the day to close negative. That keeps alive the potential for completing the pullback under 56.80 to 55.50. But closing back above 57.40 would be entirely credible for resuming the rally.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Monday’s gap up was too shallow and premature to form a bottom. That didn’t necessitate Tuesday’s late-morning plunge to fresh lows, which further delays any sort of bottoming pattern, let alone recovery.
Mid-day Update… Catalysts have left the building.
Sitting at highs, lacking reinforcements.
Breaking back above 2666.00 this morning would all but marginalize sellers, dismiss the attempt to break under 2663.25 and probe overnight highs. Recovering 2666.00 did probe overnight highs, and higher. Despite not triggering bias-up, the 2673.00 bias-up target was eventually touched.
That was the noon hour high. It was never put into play, but its attraction is neutralized. And there is no higher attraction in-play.
Attractions below, we have a couple.
The bias environment ended in a surge that was triggered by a favorable tax reform headline. Its 2667.50 origin is likely to be retraced. The morning’s rally above its 2667.25 bias-up signal originated during a no-bias environment, which is required to be retraced. No-bias just triggered after only touching the bias-up signal.
Meanwhile, election results from Alabama and a policy statement from the FOMC are right around the corner. Beyond the prevailing momentum, the rally doesn’t have any catalysts to attract reinforcements. Momentum is most of the battle, but back under 2669.50 would start to reverse it down.
Look ahead: Economic Calendar – for Wed Dec 13, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s CPI is the morning’s only high-profile report, but it is also reliable for influencing price action. Price action often becomes muted ahead of the afternoon’s FOMC policy statement. Its reaction is very reliable for offering multiple trading opportunities. All the more so during quarterly Q&A sessions with the Fed chair. That tends to ensure a WedEX signal forms.
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Policy Statement
2:00 PM ET
FOMC Forecasts
2:00 PM ET
*Fed Chair Press Conference
2:30 PM ET
WedEX
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2669.75 | 2672.75 |
| …would target | 2675.25 | 2678.50 |
| Bias-down: under | 2662.75 | 2666.00 |
| …would target | 2657.50 | 2660.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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… Holding up more than holding back.
Overnight range is persisting.
Yet another attempt to probe above 2667.25 failed before the open. It reacted back down to unchanged at the open, and pierced the overnight lows during the opening 15 minutes of volatility. Its 2663.25 retest held, while RSIs diverged positively.
Bouncing back above the open stopped 3 ticks short of the 2667.25 bias-up signal, triggering no-bias. Too late to trigger, and too late to invoke the grace period, 2667.25 was touched in time for breaking through 10:30. No-bias would have been invalidated. It held.
All of which suggests that 2667.25 is this morning’s upper-end. Which suggests the morning will include some sort of reaction down. Which could be a test of 2660.50, or of the 2657.75 bias-down signal.
No-bias suggests the window will be contained within its signals that had failed to trigger. Probing higher anyway is called “no-bias trending.” It would be doomed to failure, but could meanwhile test the 2673.00 bias-up target.
Since RSIs didn’t deteriorate or diverge into the test of 2667.25, sellers aren’t impressive. They didn’t exploit the open’s opportunity to reject the overnight range. I’m giving “no-bias trending” a benefit of the doubt — a fresh high just touched 2669.00 — fully expecting its ultimate retracement, with little reliability from where and when.