S&P
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2650.00 | 2649.00 |
| …would target | 2657.25 | 2656.50 |
| Bias-down: under | 2637.25 | 2636.50 |
| …would target | 2631.50 | 2630.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
Friday morning’s 43-point collapse was cut to 35 points into the afternoon’s bias environment. It was cut to 5 points ahead of the close.
The pattern’s lowest potential objective was touched at the morning’s 2605.00 low. Correcting off of the 2657.25 target didn’t delay extending by interjecting bounces that would have refueled sellers. Pretty much all available selling pressure was expended.
All near-term selling pressure.
Retracing all of Friday morning’s collapse before the weekend would have neutralized the attraction above to its 2648.00 origin. That would have been difficult to defend against renewed selling ahead of the weekend’s impending illiquidity. The Flynn shoe has fallen, all but immunizing the market against more news from that story. And the tax reform vote didn’t happen during market hours, preventing a “sell the news” effort.
Ending Friday flat doesn’t sufficiently reward buyers for absorbing all that near-term selling pressure. Still not rewarding them Monday morning could find that selling pressure has been refueled by the bounce, or re-inspired by weekend developments.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US THIS WEEKEND FOR SATURDAY REVIEW AT 9:30 AM ET. ITS LINK WILL BE EMAILED IN THE MORNING.
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))
Thursday’s bounce to the original 1.1930 sell signal had reacted down Friday morning to touch the 1.1860 sell signal, but bounced back up to test 1.1930.
Gold Feb Contract (GC, ETF: (GLD))
Spiking up Friday morning in reaction to the Flynn news probed back above Wednesday’s 1288.00 close. Its recovery would try rejecting Thursday’s break under 1280.50-1283.50. But extending up to 1292.50 didn’t prevent reversing back down to 1282.00. A second consecutive higher close Monday would have confirmed, but closing under 1288.00 would target fresh lows under 1273.00.
Silver Mar Contract (SI, ETF: (SLV))
Bounce potential to 16.60 was touched by the spike up in reaction to the Flynn news. With or without a bigger bounce up to 16.80, developing a bottoming pattern must still spend some time backing-and-filling.
30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s late bounce touched 153-00 (to within 1 tick) and avoided closing under it, which would have targeted a retest of 152-04 or lower. Following-through overnight gapped up to 153-20 and extended sharply through 154-00 to 155-09. The afternoon dipped back down toward 154-00, but little or not further backing-and-filling should be necessary before extending the rally to fresh highs.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight rallying off of the 57.40 buy signal gapped up 75 cents Friday morning, and then extended another $1. The gap back up to last Friday’s close was attacked to within a dime before reversing down toward the 57.90 open. Stopping pessimistically short of the prior suggests it will be probed by more than just a little, perhaps up to the rally’s 61.05 target.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Bouncing overnight gapped up to test 3.10-3.12 resistance which must hold through the close to maintain the decline’s 2.87 target.
Mid-day Update… No news would be better news.
Flynn statement rattles the market.
This morning’s no-bias had at least attacked its 2651.00 bias-up signal. No-bias trending above it would have been credible. Doomed, but credible. Then the news broke that Mike Flynn would please guilty, driving the market down sharply. Then another headline that Flynn claimed he was directed by Trump.
Tuesday afternoon’s “unfinished business below” at 2617.50 was neutralized to within 2-3 ticks. Its reaction up was undermined by 3-minute RSI being persistently oversold. 
Indeed, another plunge collapsed to touch 2605.00.
2605.00 was the next lower objective under 2617.50 that I described during this morning’s Market Tour. Its first reaction up tested 2627.00. This afternoon has extended higher to trigger the 2632.00 bias-up signal. Its 2637.50 bias-up target is now being probed up to 2640.00.
This morning’s collapse was triggered by a knee-jerk reaction to headlines. This is almost always retraced entirely, often sooner rather than later. The plunge’s 2649.00 origin is now only 9 points higher, having rallied 35 points off the low.
Meanwhile, the tax reform vote is scheduled to begin at 2:00. It’s very likely to pass, but the past two sessions already expressed a lot of favorable sentiment for that. An obligatory knee-jerk reaction to the vote could get the market back to the plunge’s 2649.00 origin — perhaps through it to also test 2654.00. Or the plunge’s origin may have been tested already.
No other optimistic development could be anticipated before the close. And the weekend’s impending illiquidity could trigger Friday Factors that influence selling into the close. New session lows would be possible, but not required. Just reacting down would be likely, although be careful of a bigger squeeze into the weekend — the Flynn news may have been overly-discounted, too.
Look ahead: Economic Calendar – for Mon Dec 4, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: One post-open report Monday is high-profile, but has no track record for also influencing price action.
Factory Orders
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET