S&P
Post-open Review… Digging deeper for buyers.
The lows that yesterday left outstanding.
Yesterday’s opening rally would have been more substantial had it originated from a slightly deeper opening dip. And had that dip recovered a relevant level through the open.
Its shallow, premature origins didn’t prevent surging. But the surge was limited. And it was retraced entirely to touch yesterday morning’s open 2572.50 before today’s open.
This morning’s open tried to hold. Its wide 5-point 2571.00-2576.00 range ultimately resolved down, sharply. An air pocket opened down to 2564.25, 3-4 points under the downside potential that yesterday’s premature rally had avoided. But what about its recovery.
Recovering 2570.00 into the bias environment would have signaled sellers were done. But 2570.00 was still being overlapped at 10:15, and also at 10:30. That’s not enough, and it’s too late to do more. Too late, and too early. Exiting the bias environment at 11:30-noon above its 2578.00 bias-down signal would serve by proxy as if 2570.00 had been recovered earlier.
Meanwhile, the open’s low could be retested. Back under 2568.00 would trigger it, which is being attacked now. Recovering from the low’s retest could still recover. Recovering from the low’s retest is less likely, and very vulnerable simply to extending the decline.
The First Trade & Pre-open Tour Recording… Trying, trying again.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Monday’s open was already recovering from a 10-point overnight drop that had attacked 2570.00. The drop was actually down 14 points from Sunday night’s initial rally attempt. All of which was eventually retraced, and then probed momentarily by 1 point up to 2585.50. The open’s rally had retraced most of the overnight drop before slowing its pace, probably because the initial drop stopped short of its potential to 2566.75-2568.50. Which is why we anticipated that the afternoon’s steeper slope would fail, and from where, to end the day probing back under the open’s 2582.25 highs. Overbought RSIs were left outstanding at the high.
Overnight action’s new info…
Reversing down from Monday’s late surge had dipped back under the open’s 2582.25 highs. The dip extended through the close, and through midnight, to eventually attack 2577.00 within 1 tick. Surging into and out of Europe’s opens touched 2582.52 before reversing back down to again attack 2577.00.
If, then…
Monday afternoon’s windows did gain enough traction to suggest that an overnight drop would recover. the question is from where. The overnight test of 2577.00 is already sufficient, assuming that this morning’s open is exited back above yesterday’s opening highs — but it has gotten a little late to still be testing overnight lows if a recovery is so close. Otherwise, holding a test of 2574.00 could be the last opportunity to avoid 2566.75-2568.50. And that could be the last opportunity to squeeze in a retest of last week’s highs before a deeper pullback into the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2583.00 would be unlikely to trigger the 2585.00 bias-up signal at 10:15. Exiting the open above 2580.25 would be unlikely to trigger the 2578.75 bias-down signal. Exiting the open under 2575.00 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2589.00 | 2586.75 |
| …would target | 2595.00 | 2592.75 |
| Bias-down: under | 2580.25 | 2578.00 |
| …would target | 2574.75 | 2572.50 |
| Signal status: waiting for trigger | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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)
Monday’s rally was premature. It started from too shallow of a pullback, and too near the open. Dipping to 2566.75-2568.50 and then recovering 2570.00 would have trapped intraday shorts to refuel longs. Post-open weakness also would have delayed the recovery leg until it could blend into the noon hour’s timing window and extend into the afternoon.
Dipping only to attack 2570.00, only pre-open, and surging through the first hour, didn’t attract reinforcements. Eking higher into a late surge up to 2585.50 was retraced back under the opening surge’s 2582.25 high for no net gain.
Monday’s rally did gain some traction. Exiting the afternoon bias environment above the noon hour’s high was the setup, and extending to fresh session highs through the 3:10-3:20 proxy window was the confirmation. If not already extended higher into the close, the traction can offer bullish context that enables a recovery after trending down overnight.
Overbought RSIs at Monday’s high require an eventual retest. That could also offer bullish context to recover from an overnight dip. Retesting Monday’s high already overnight would become vulnerable to reversing down, somewhat similarly to Sunday night’s initial rally.
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 Dec Contract (EC, ETF: (FXE, UUP))
Monday’s narrow ranging up to 1.1700 didn’t gain any traction to extend the bounce, and back under 1.1635 would resume the decline.
Gold Dec Contract (GC, ETF: (GLD))
Friday’s late break under the 1275.50 sell signal was still overlapping it. Monday’s gap up above Friday afternoon’s 1277.00 highs is trying to invalidate the break, but must still close above 1280.50 to be credible.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s gap up extended to test 17.05 which must hold as resistance to maintain the 16.95 sell signal that is targeting and 16.70 and 16.50.
30-year Treasury Dec Contract (US, ETF: (TLT))
Monday’s inside day began by gapping up to attack the 153-00 sell signal that had triggered Friday. the balance of the session drifted back down to unchanged. Immediately recovering 153-00 Tuesday would be credible for reversing up to test 154-02, but closing under 152-00 could target a retest of month-old lows under 151-00.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The narrow ranging that had begun last Monday afternoon persisted through Monday afternoon, momentarily piercing the range’s 56.45 low, still having room down to 55.35 before signaling momentum reversing down.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping down several cents at Monday’s open was soon recovered to pierce Thursday and Friday’s 3.21 highs by 2 cents. That didn’t extend, and dipping back down toward the open’s gap at the multi-session low. Closing beyond the range Tuesday would be a high-confidence breakout, likely to extend in that direction.