S&P
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2500.75 | 2498.00 |
| …would target | 2506.00 | 2503.50 |
| Bias-down: under | 2492.50 | 2490.00 |
| …would target | 2486.25 | 2483.50 |
| Signal status: BIAS-UP | 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)
We knew there was no bullish reason for Friday’s post-open retest of 2495.50. And we suspected that weekend illiquidity inhibited sellers from breaking under it. Monday’s plunge through it behaved as was expected, discovering an air pocket and bouncing from “lower prior highs” at 2485.00-2486.00.
That setup was then likely to begin an extended pullback down to 2460.00. So, why should we question that? Two reasons. First, the morning’s 2503.00 objective above wasn’t rejected, so it became “unfinished business above” to be met eventually. Second, the plunge’s catalyst was the knee-jerk reaction to a news headline whose weak-handed sponsorship crowds out stronger distributive sellers.
Recovering 2495.50 through the close would have essentially trapped shorts. A very late trending attempt did touch 2495.50 in the very last minute of Monday’s cash session, and futures extended to 2497.00. But that was 3 minutes too late.
Probing higher overnight or tomorrow morning is possible, as is fulfilling the 2503.00 objective above. Neither of which is required, but would still be likely to resolve back down into Friday’s break lower. And having held 2495.50 as resistance through the close, the decline is free to resume immediately.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot… War? Well, that changes nothing.
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))
Friday’s test of the ~1.2030 corrective bounce limit had resolved down into the weekend. Germany’s election results triggered a gap down Sunday that extended back to Wednesday’s 1.1917 low Monday morning. And lower, attacking 1.1885, probably on the way to test 1.1845.
Gold Dec Contract (GC, ETF: (GLD))
Volatility was subdued Sunday night, still needing to test or fluctuate around Thursday’s gap down low. That lower attraction also dooms to failure any interim bounce. We’ll soon see, since N. Korea’s war speech triggered a surge to attack 1314.00. That could be the bounce’s peak, if not 1318.50.
Silver Dec Contract (SI, ETF: (SLV))
Still fluctuating Monday morning at or under 17.00 was one step closer to forming a bottom. But N. Korea war talk triggered a spike up to test 17.15 resistance that leave at least one fresh low outstanding.
30-year Treasury Dec Contract (US, ETF: (TLT))
Firming Sunday night was still below the 154-30 buy signal and within proximity of retesting the 153-14 support. N. Korea war talk triggered a “flight-to-safety” whose spike up tested 154-30, anyway. But not closing above it keeps alive the 153-14 potential.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Other verbally bellicose escalation came from Turkey, sending Crude Oil to fresh highs above its recent multi-session range. Holding the 50.00 sell signal last week was rewarded by probing fresh high up to 51.95s. A second consecutive higher close on Tuesday would confirm Monday as a breakout. Closing back within the recent range could reverse back under 50.00 quickly.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Firming Sunday night up to 2.96 didn’t prevent Monday morning from probing under Friday’s lows down to 2.91, targeting 2.84.
Mid-day Update… Stuck?
Break lower can end today, or not for awhile.
The prior week’s multi-session range that was providing support at 2495.50 is now providing resistance at 2492.50. And chipping away at 2495.50 did reveal the “air pocket” below it as was suspected.
Its break was likely to produce a test of 2485.00-2486.00, which is where the air pocket bottomed. The next lower objective is essentially 2460.00, but the catalyst being a headline could avoid that — if recovered today.
Recovering today would have plenty of upside. This morning’s bias parameter had put into play an offsetting test of its 2503.00 bias-up signal. And it wasn’t rejected. The 2496.00 bias-down signal wasn’t broken until after 10:30. Its 2489.75 bias-down target was still being overlapped as the bias environment was lapsing. Bias intact, so 2503.00 has become “unfinished business above.”
I’d much prefer the confidence of clearly holding 2489.75 as support, or breaking it. Fresh session lows are possible, regardless of an attraction above to 2503.00. exiting the noon hour back above 2492.50 would have suggested a detour has been avoided. Triggering bias-down would have said otherwise. Neither setup formed.
Look ahead: Economic Calendar – for Tue Sep 26, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: There’s nowhere to hide from Tuesday’s list of Fed speakers, most of whom are reliably influential to price action. Especially the afternoon appearance of Fed chair Yellen. Plenty of econ reports are available, too, nominally influential to price action.
Neel Kashkari Speaks
Mon 6:30 PM ET
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Charles Evans Speaks
9:30 AM ET
*Loretta Mester Speaks
9:30 AM ET
New Home Sales
10:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
*Janet Yellen Speaks
11:50 AM ET
*Raphael Bostic Speaks
12:30 PM ET
2-Yr Note Auction
1:00 PM ET