S&P
Market Wrap (recording & summary)
Tuesday was a most unattractive session for trading opportunities. But it wasn’t the least attractive opportunity to apply the methodology. One aspect, at least — to know early that it would be a dry cleaners morning (more productive to run errands). The afternoon gave the same signal, and applied until the bias environment began lapsing at 2:30.
That’s precisely when the noon hour’s high was probed. And that probe persisted through the close, touching Monday’s 2557.75 opening high.
Having closed within prior intraday ranging, extending higher Wednesday all but requires maintaining a gap up through the open. The pattern otherwise remains vulnerable to declining immediately — more so a serious attempt at reversing the trend down, and less for backing-and-filling.
On that latter point, note that Tuesday’s close trended up. And also that the afternoon’s 2552.50 low was contained in the bias environment. So, gapping down to and/or through 2552.50 could form a “session-long decline” setup. That’s not the session’s only possible setup, but it makes selling overnight weakness more compelling than buying it.
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 gap down from Friday’s intraday round trip gapped down Tuesday to attack 1.1760. Neither session extended down intraday — Tuesday firmed to attack Monday’s 1.1830 close. Breaking under 1.1760 remains likely and likely to extend down sharply.
Gold Dec Contract (GC, ETF: (GLD))
Monday’s failure to confirm Friday’s opening surge extended down sharply overnight to test the pivotal 1288.00 level. Closing any lower would next target a complete correction to 1277.50-1280.50. Probing it intraday attacked 1283.00, which would allow a correction to end by rejecting a fresh low Wednesday morning.
Silver Dec Contract (SI, ETF: (SLV))
Dipping Monday to attack 17.30 support extended lower overnight to open Tuesday at 17.11. Extending down lower through the morning tested 17.00, whose break would target 16.85.
30-year Treasury Dec Contract (US, ETF: (TLT))
Narrow ranging overnight found strength Tuesday morning, recovering to attack Friday’s 154-5 highs. That’s not yet sufficient to confirm the rally is resuming.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight strength stopped short of Monday morning’s high, and then Tuesday morning dipped on peace seeming to break out between Iraq and the Kurds. The gap back down to Friday’s 51.40 close was filled, neutralizing its attraction below, and maintaining the minimum 53.65 upside objective.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Despite still having at least 1 cent remaining in its minimum pullback objective to 2.92, rallying overnight returned to the 3.00 pullback limit which had broken lower Sunday night. It was eventually probed up to 3.02, but the afternoon reacted down to 2.96, stopping optimistically short of filling the gap back to Monday’s close, still having potential down to 2.89 and 2.82.
Mid-day Update… Not enthused.
New highs aren’t attracting new buyers.
Immediately collapsing this morning without first surging would have been credible for extending down. Immediately surging would have been credible for extending up. Instead of exploiting either setup, the opening hour held a narrow 2-point range between 2554.00-2556.25. And THEN trending was attempted.
By then, collapsing only attacked 2552.00. It was too late for that price action to be considered the open. It could have extended deeper, but it was recovered entirely back up to 2556.25. Now, dipping into and out of the noon hour is attacking the morning’s low to within 1 tick. It could extend deeper, but that isn’t required any more so than this morning’s setup.
Recovering entirely back up to 2556.25 would all but ensure another probe of fresh highs. There’s meanwhile no requirement for this session to budge at all. But suddenly sliding as the afternoon bias environment begins lapsing at 2:30 would be credible for extending down.
Look ahead: Economic Calendar – for Wed Oct 18, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several Fed speakers on Wednesday morning will likely give important clues to interpreting their reaction to the afternoon’s Beige Book data. The timeliness of their insights would make the Beige Book reaction more impactful.
*Stanley Fischer Speaks
time unknown
MBA Mortgage Applications
7:00 AM ET
*William Dudley and Robert Kaplan speak
8:00 AM ET
Housing Starts
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Beige Book
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2559.00 | 2557.00 |
| …would target | 2564.00 | 2562.00 |
| Bias-down: under | 2553.00 | 2551.50 |
| …would target | 2547.50 | 2545.50 |
| 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.