S&P
Market Wrap (recording & summary)
The gap from Monday’s 2563.50 close is natural support. It was substantial support Tuesday when tested morning by the post-open plunge from 2569.25. Its support protected against extending down to fulfill a test of 2560.25 that had been put into play.
Recovering to 2570.25 didn’t protect against another downdraft, and had started becoming likely. But being triggered by headlines upset the natural timing that would have produced fresh post-open lows. So, 2560.25 becomes “unfinished business below.”
The delay in fulfilling 2560.25 allows more room to test it, such as down to 2556.00-2557.50. There’s still room down to 2554.00 before threatening a deeper detour prior to fulfilling a new trend high close. No further detour is required, and fresh highs could still come first.
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 late dip barely touched 1.1760 before bouncing yet again. The gap back up to Friday’s close was barely touched Tuesday morning, neutralizing its attraction above, and clearing the way even further for a break lower. ECB policy statement and Draghi’s press conference is two days away.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down Tuesday ranged mostly within and around the original 1277.50-1280.50 pullback target that has already held a couple of tests. Closing above 1280.50 keeps alive the bottoming potential and above 1284.50 would suggest momentum reversing up. Closing above 1288.00 would signal a new upleg underway.
Silver Dec Contract (SI, ETF: (SLV))
Silver’s slight gap down to 17.00 probed under it Tuesday morning, holding within Monday’s range, and needing to hold 17.00 to maintain the bottoming pattern. Closing back above 17.11 would help to confirm, and above 17.30 would launch a new upleg.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping down Tuesday opened at the 151-18 pullback objective which the two-week old recovery had avoided. Now closing back above 152-20 would launch a new upleg, likely fill the gap back up to last Thursday’s 153-14 close. Closing under 151-18 would make the recovery path difficult.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
An overnight dip was recovered into Tuesday’s open and extended back to recent highs intraday. There is still no bullish excuse to further delay the minimum 53.00 attraction above, whether only to neutralize it or to probe above it. API and EIA reports are being greeted from a position of strength.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Tuesday’s narrow ranging continued to hold the 2.96 support whose break would allow a more durable bottom to form back down to 2.84.
Mid-day Update… Freeze!
Gap fill holding, and holding, and holding.
Greeting the open at this morning’s 2568.25 bias-up signal’s resistance seemed suspicious. Its quick reaction down fit better, putting into play fresh lows. Only the gap back down to yesterday’s 2563.50 close was tested.
Reacting to a gap is not unusual. But the reaction’s reaction has gone into hibernation. Its return to the 2567.75 opening print didn’t reverse back down, and neither did it accelerate higher. Instead of inflecting there, a 2-point 2-hour range has developed.
Which changes the pattern, a little. Mostly just its behavior. The narrow range’s room for noise is defined by 2566.25-2570.25. Breaking either would still be likely to extend in that direction. But breaking lower would likely find an air pocket down to fresh lows. Breaking higher would at least be vulnerable to accelerating.
Resolving up won’t invalidate the “unfinished business below” now outstanding at 2560.25. But resolving up would enable fulfilling unfinished business above with a new trend high close.
Look ahead: Economic Calendar – for Wed Oct 25, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Pre-open Durable Goods is both high-profile and reliable for influencing price action. Additionally, any price reaction is likely to be duplicated by post-open reports. And there are two Housing sector reports which aren’t otherwise influential, but could generate their own reaction if one were to contradict the other by enough differential.
MBA Mortgage Applications
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
FHFA House Price Index
9:00 AM ET
New Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2572.50 | 2570.25 |
| …would target | 2577.75 | 2575.75 |
| Bias-down: under | 2566.00 | 2564.00 |
| …would target | 2561.25 | 2559.00 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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.