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))
Wednesday’s dip to the make-or-break 1.1790 level did neither Thursday morning, except hover there narrowly. Although, that does offer confirmation to the level’s relevance.
Gold Feb Contract (GC, ETF: (GLD))
Ranging narrowly Wednesday was not to be equated with stability, as Thursday’s $8 gap down to fresh lows illustrates. There is potential for holding 1253.00, which was attacked to within $1. But Friday’s Employment Situation report is being greeted from a position of weakness. That doesn’t dismiss potential for an initially favorable knee-jerk reaction up, but it limits its potential to maintain a rally.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s break lower from a two-day range qualified as a breakout, which Wednesday’s lower close confirmed and required an eventual third lower close. Thursday’s gap down fulfilled it. But Friday’s Employment Situation report is being greeted from a position of weakness, still targeting 15.65-15.70.
30-year Treasury Dec Contract (US, ETF: (TLT))
The likelihood for backing-and-filling had probed just the upper-end of its 153-14/153-22 pullback limit overnight, but had recovered to open above 154-00. That was repeated intraday after consolidating narrowly through the morning, but deeper, testing the pullback limit’s lower-end down to 153-09. Closing under 153-10 would reverse the trend back down, albeit vulnerable to reacting favorably on Friday’s Employment Situation report.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Thursday was still an “inside day” contained within Wednesday’s range. It was resisted above by what had been the 56.80 pullback limit whose week-old support test had launched a rally back to the high. Holding 56.80 keeps alive potential down to 55.45-55.55.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of strength didn’t prevent trending down overnight. Gapping down 4 cents to fresh lows extended down intraday to a full dime below the decline’s 2.87 target that had held Tuesday. Any recovery must begin by recovering 2.90.
Mid-day Update… Waiting for payday.
Meeting the rally’s target enables inhibition ahead of tomorrow’s payrolls.
I certainly did not give buyers any benefit of the doubt through the open. That would change either by the opening 15 minutes holding a test of yesterday’s 2628.50 lows, or else by triggering the 2634.25 bias-up signal at 10:15. The latter developed, late, but still valid. One pullback developed along the way to the 2642.25 bias-up target.
The target was met during this morning’s bias environment. The noon hour consolidated narrowly around it. A blip-up coming out of the noon hour probed it, piercing the afternoon’s 2643.50 bias-up signal. A blip-up that has probed under the noon hour’s narrow range.
Triggering this afternoon’s bias-up would have been difficult. The morning’s buying pressure was fulfilled. And anxiousness ahead of Friday morning’s Employment Situation report commonly paralyzes Thursday afternoon price action.
Trending differs from backing-and-filling. That could still develop back down to this afternoon’s 2636.50 bias-down signal during the no-bias environment. And lower afterward. Meanwhile, probing above 2643.50 would be “no-bias trending” that requires being retraced.
NOTE: All price level references and bias parameters are now basis MAR, which has become the front-month, and currently trades at a ~2.50 premium to DEC.
Look ahead: Economic Calendar – for Fri Dec 8, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The monthly Employment Situation report is usually offered in a vacuum with little or no other economic data. Friday’s pre-open report is followed by a post-open high-profile report with its own reliable track record for inhibiting and/or influencing price action. And its likely to duplicate any reaction to the payrolls report.
*Employment Situation
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
Wholesale Trade
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2641.25 | 2643.50 |
| …would target | 2646.50 | 2648.75 |
| Bias-down: under | 2634.25 | 2636.50 |
| …would target | 2629.25 | 2631.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL… PRICES ARE BASIS MAR, A 2.50 PREMIUM TO DEC |
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… What’s the hold-up.
Rolling front-month coverage forward to Mar this afternoon.
[Mar is trading at a ~2.50 premium to Dec] The overnight drop had extended down to 2626.50 (basis Dec) just before the open. RSIs didn’t get oversold, so the open’s retest didn’t diverge positively. That didn’t prevent rallying back to unchanged at 2629.25, and then extending higher to the 2631.75 bias-up signal.
Fluctuating around bias-up at 2629.50-2632.50 invoked the grace period. Bias-up triggered decisively at 10:30. And it has extended up to 2635.00 while taking RSIs overbought.
The bias-up target in-play is 2639.25 (2641.50 basis Mar). Just for having retested intraday yesterday’s “unfinished business above” at 2635.50 enables a sell signal to be productive — despite being short of the bias-up target.
I’m viewing this bounce as counter-trend, and likely to resolve down. Already testing the 2635.50 unfinished business above overnight has resolved down to open in negative territory. Triggering bias-up and retesting 2635.50 intraday don’t reinforce the bearish assumption. Regardless, entering the noon hour back under this morning’s bias-up signal would at least be likely to delay further upside.