S&P
Post-open Review… Is that distribution in your pocket?
Post-open surge collapses. Again.
The distribution template we discussed before yesterday’s open was likely to influence the market from a fresh high. The open probed Friday’s high, but only filled the gap back up to Thursday’s close. Thursday’s high wasn’t touched before price collapsed.
That didn’t change whether the template could still be tracked. 
Au contraire, yesterday’s action endorsed the template’s active influence. But collapsing was only likelier to require a fresh high, first. And preferably, a fresh high that fulfilled the 2552.00 unfinished business above.
This morning’s open maintained a gap up above yesterday afternoon’s 2547.00 high to suggest momentum was reversing up. A sudden surge probed fresh highs up to 2553.25. And as quickly, 2552.00 was being tested as support. Then broken, as price collapsed to 2543.00.
There is no more unfinished business above required to attract price higher. Even today’s 2549.00 gap up was under prior highs, so it doesn’t require a retest from below. That room for a pullback down to 2536.00 would no longer be a pullback, but a trend reversal. So, resuming the rally despite no upside requirement would be bullish.
The First Trade & Pre-open Tour Recording… Pushing into resistance.
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 had been greeted by a rally retracing Friday’s drop. Extending higher post-open to fulfill “unfinished business above” at 2552.00 would have been likely to reverse down. But post-open action only filled the gap back to Thursday’s 2550.00 close before collapsing to 2544.00. The afternoon bias environment also collapsed, sliding to 2539.25. A late 3-point bounce firmed further through the cash session close up to 2544.00. Oversold RSIs were left outstanding at the low, albeit only an errant tick. The ongoing Up/Down-crash setup was invalidated by a second consecutive negative close.
Overnight action’s new info…
A little spike up to 2546.50 with Asia’s opens was retraced entirely back down to 2544.00. The correction was recovered entirely into Europe’s opens, adding an additional 3 ticks up to 2547.25. That was also retraced entirely back down to 2543.75, and yet another recovery is now testing fresh highs at 2548.00.
If, then…
Monday’s 2539.25 low requires a retest, and gapping up can avoid it. Gapping up at least above Monday afternoon’s 2546.00 high, and preferably above 2547.75. Both are being tested now. An overnight dip to 2536.00 (+/- 5 ticks) could have neutralized the attraction below and then recovered pre-open. That’s still possible intraday if the gap up doesn’t hold. But extending higher would have no excuse not to fulfill the 2552.00 unfinished business above.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45
Phonetic dictation…
1010 it is October 10 it is Tuesday morning at 7 to Tuesday Morning Market tour I just a quick refresh of what is outstanding what the influences are outstanding now from yesterday’s low is 7 guys one minute and 3 minute RSI simultaneously ever sold it yesterday yesterday’s 25 3925 low it was actually wasn’t so much as it was credible support because of so much targeted sport down there the pattern could have extended down but it made sense for that to be a low and it was we tested it was actually 25 3953 975 that made sense to be a couple patterns in there that satisfied their sewing pressure and it was retested but not that errant tick and one minute positively on the retest for the Target so the rally from their recovering from their perfectly credible now the question is whether that doesn’t change that we do have unfinished business below with the retest of yesterday’s below but we can get out of its orbit by opening back Above This range here’s this range from yesterday midday that launched this break lower remember we were just never looking for this pattern to recover or nears Buy Signal was substantially higher really the nearest bicycle would have been tested right here right now finally when the midday range was developing and went the other way but had the recovery yesterday afternoon at the lower end of that range but above it or if we just above it and we can get out of the orbit of yesterday afternoon and what is that that would be Thursday before reversing down little less likely to happen so if we get anywhere near yesterday probably going to plow through it but that doesn’t completely closed Dutchess if the Gap up that’s being attempted doesn’t catch doesn’t catch and extend that’s where we test yesterday’s low comes in and by the way not just his stays low very likely at that point down to 36 25 36 + 1 – probably – but twenty-five 36 + 1 – .5 – 6 still there from a position of strength in that there’s that I’m finished business above it was at first attempt on Friday and that yesterday’s attempt at least went out actually the cash Station close is 2540 – 25 still testing 43 so probably recovers but if that is if we get a down leg in here just looking for a substantial today even in the worst-case scenario at least temporarilyray gun in the Aussie looking for an eventual lower close at meanwhile and now we can start tracking meanwhile if there is a balance 78 is a likely bounce limit the pound left a gap outstanding below but that is a confirmed breakout itself require an eventual requiring an eventual there they were closed it’s bouncing bouncing that just to 1:32 but could be on its way to testing is filling another Gap above which in fact overnight is denoted by the dashed line there’s definitely potential there’s a little fresh air but that’s what we would get to bouncing there’s no requirement Euro probably more matter of when not if 11760 finally breaks it is just being fought with optimism optimism 118 what 1850 is right in this range the likelihood then being dipping back down or at least if not the likelihood to another dip under 11760 dipping into negative territory Thursday all the way to 17 resistance probing into an overnight pattern but there is in the unfinished business last night and now it is to 1294 element but there is room for 1330 no one and there’s really just a range in here very sloppy long blonde failed Friday and we retraced entirely too much optimism to quickly would have the same effect in Reverse as did too much pessimism to quickly Friday morning will that window is now past that risk is now past little dip down here to 15121 5118 would be beneficial would be from a position of strength of having slow played the recovery of having avoided resuming the decline so very similar to the same principle that we were applying Friday morning from a position of strength Pro blower the attracted backup position of strength today Pro blower not as low attracted back up if not on the next that pavlovian response turns into actually crude oil testing testing it overnight and finally Natural Gas doesn’t have we had not a multi multi session range leading into Friday’s break lower and Fridays break which is on Monday which allows for the opportunity to that didn’t happen so that’s not a bottom not yet and yet there’s potential for accumulation but it is close and we can give it to the upside 304 .
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2548.00 | 2546.00 |
| …would target | 2554.00 | 2552.00 |
| Bias-down: under | 2542.75 | 2540.75 |
| …would target | 2536.75 | 2534.75 |
| Signal status: LATE BIAS-UP, TESTED BIAS-UP TARGET | 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)
Did the ongoing rally just save itself from disaster? The Up/Down-crash now has two consecutive session not closing higher. The rubber band isn’t being stretched so tightly that it must snap back down — 
ranging flat-to-lower Friday and Monday have let off some of the rally’s steam.
Of course, that addresses the setup’s “Down” result. It also has potential for “Up,” or had. Losing its count before reaching the 10th session has also lessened potential for exploding higher. Fresh highs remain likely, if only to neutralize the “unfinished business above” at 2552.00. A crash isn’t the only way to react down.
Monday’s open was tracking a template for probing a fresh high, perhaps up to 2552.00, before reacting down sharply. Done early enough, that could have fulfilled selling pressure in time to recover into the close. But the open stopped pessimistically short. And a recovery was inhibited by the attraction back down to oversold RSIs at the morning’s 2543.50 low, and to testing the morning’s 2541.00 bias objective.
Monday’s late drop fulfilled those, while creating a new attraction to 2539.25. A late bounce didn’t recover 2543.50 in time to invalidate the downside momentum, which could extend to 2536.00 (+/- 5 ticks) even if only overnight. Rallying Tuesday morning would all but require gapping up to be credible for extending.
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))
Firming Sunday night held up through Monday morning to avoid resuming the decline, and the anticipated break back under 1.1760, which remains likely so long as bounces hold 1.810
Gold Dec Contract (GC, ETF: (GLD))
Although Friday’s brief probe of fresh lows had been retraced while failing to gain traction, Sunday night’s bounce to 1288.00 resistance was premature for already launching a recovery. Monday’s gap up wasn’t any likelier to extend, still likely at least to fill the gap back down to Friday’s close, potentially down to 1269.50.
Silver Dec Contract (SI, ETF: (SLV))
Sunday night’s test of 16.90 was exceeded Monday morning to probe above 17.00. Holding a test of the decline’s 16.50 target on Friday does allow a bottom to form, although a test of 16.60 as support would help to make a recovery more credible.
30-year Treasury Dec Contract (US, ETF: (TLT))
Monday’s shallow range hovered just above the 151-18 pullback objective that would help to fully form a bottom. Its test remains likely, although not already resuming Friday’s dip does make a rally effort likely within the next two sessions. Closing above 152-20 would be credible for extending higher.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s break wasn’t from a multi-session range, so Monday wasn’t capable of confirming it. So, ranging narrowly intraday — instead of extending down — doesn’t reject the downside momentum. A recovery should be obvious Tuesday to avoid lower lows.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Extending down Friday under the 2.89 target already had prevented Monday from recovering. Fresh lows were likely, but closing positive could have then suggested a bottom was forming. The morning’s fresh lows down to 2.83 consolidated through the afternoon but did not recover.