S&P
Post-open Review… Straight up?
Gap and run creates anchor to absorb reversal attempt.
Sunday night’s open had leap-frogged over the 2465.75 bias-up signal. Its 2472.25 bias-up target was tested as support before the open. 
Gapping up to 2474.00 resumed the rally, extending relentlessly up to 2481.75.
1-minute RSI had diverged negatively along the way, but only while 3-minute RSI remained “persistently overbought.” Twice. Each setup offered a buying opportunity. Not until 3-minute RSI left oversold territory did the 1-minute RSI’s negative divergence at 2482.00 actually influence price action.
Immediately. Its reaction down was retraced 61.8% of the way back up to 2482.00. The next reaction down has pierced 2479.00.
Still, we’re only looking for a temporary corrective dip. Trending up through the open created an anchor that will want to be retested in case of a pullback. The dip may be done already, although its likely objective is 2477.50, and potentially 2475.00.
July’s ~2484 high basis SPX has been attacked to within a quarter. But not touched. Another sweet spot? It doesn’t require a retest, except for the foregoing reasons described above. We’ll start to think otherwise if the afternoon bias-down signal is triggered.
The First Trade & Pre-open Tour Recording… Fasten your seat belt.
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…
Friday’s gap down and dip to 2457.00-2459.00 was all that remained from its pre-open dip to 2455.50. The collapse it had threatened was avoided for the open by trending up through 9:45. The morning’s 2465.00 high failed to recover positive territory, keeping alive the collapse potential. But any remaining selling pressure was expressed by a dip attacking the 2457.00 opening low.
Overnight action’s new info…
Hurricane Irma devolved faster than models had been predicting. Sunday night’s open reflected the surprise and its relief, gapping up 6 points to 2467.00 and soon breaking higher to test the gap back up at the prior Friday’s 2473.25 cash session close. That was relatively early in the night, but it is still being tested after having extended only to touch 2475.00.
If, then…
I asked at Friday’s close whether the session’s intraday pattern would resolve the following night, as did Thursday’s. That pattern was bearish, failing to recover positive territory that might have rejected the overnight probe of fresh lows. Sunday night’s gap up doesn’t delete Friday’s question, but adds another. First, post-open action can still trend down, despite gapping up this morning. The gap from the prior Friday’s 2473.25 close is influential resistance regardless of being filled intraday, which gapping up would suggest is being tested by extreme optimism. The second question to now ask is whether not trending down will instead trend up relentlessly. Gapping up above Friday afternoon’s highs is forming a sort of “session-long rally.” Not an optimal setup, but still credible if the open were to trend up.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 2474.00 would likely also exceed the 2472.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2467.75 would be likely at least to trigger the 2465.75 bias-up signal at 10:15.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2468.25 | 2465.75 |
| …would target | 2474.50 | 2472.25 |
| Bias-down: under | 2458.25 | 2456.00 |
| …would target | 2453.00 | 2450.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
THE ADOBE CHARTROOM ADD-ON LOADS VERY SIMPLY IN ONE CLICK, BUT PLEASE CONTACT ME IMMEDIATELY IF YOU ENCOUNTER ANY DIFFICULTY
[PROGRAMMING NOTE FOLLOW-UP: I will be available as usual on Monday. Didn’t even have to don my Star Wars costume or wink/sneer at the defendant.]
Will Friday’s pattern resolve the following night, as did Thursday’s? The pre-open threat of a morning collapse was avoided by trending up through 9:45. That even put into play a higher objective, which the morning nearly fulfilled. But spending the entire session in negative territory, and in the same range that is already distributive, doesn’t prevent breaking lower later.
But, how much later. Friday afternoon also avoided collapsing. It did trend down, probing fresh post-open lows through the proxy window. That’s too late to attract new strong-handed sponsorship, so not extending down actually reflects weak-handed optimism. Bearish.
We’ll review the bigger picture and likely scenarios for next week and their setups at this weekend’s Saturday Review. It starts at 9:30 ET, and I’ll email you its link in the morning.
Details and other markets coverage are discussed in the post-market Wrap recording 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 Sep Contract (EC, ETF: (FXE, UUP))
Probing higher overnight attacked 1.2010 and retested last Tuesday’s overnight high. Reacting down through the morning maintained positive territory, albeit ineffectual optimism that suggests distribution has begun.
Gold Dec Contract (GC, ETF: (GLD))
Thursday’s rally probed higher overnight to attack 1362.50 but Friday’s open reversed it back down to fill the gap from Thursday’s close and to momentarily pierce negative territory. Not closing above Thursday’s high does undermine the upside momentum, but it’s bearish only if an intraday retest of Thursday night’s high were reversed back under Friday’s close.
Silver Dec Contract (SI, ETF: (SLV))
Fresh highs overnight weren’t maintained through Friday morning, which failed to exploit the opportunity to confirm Thursday’s breakout above a multi-session range. Reversing into negative territory was contained within Thursday’s range and above the 17.90 sell signal.
30-year Treasury Dec Contract (US, ETF: (TLT))
New highs overnight up to 158-09 were retraced to open Friday under Thursday’s 157-30 high and to fluctuate intraday around unchanged. The 156-24 pullback limit is unchanged.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-lower overnight started trending down sharply after Friday’s 49.00 open. Consolidating at 48.25 resolved down again to attack 47.25. That all but neutralizes the “lower prior highs” and previously unfilled gap that was possible before fulfilling Tuesday’s confirmed breakout. There’s room for noise down to 47.10 or 46.95, but back above 47.95 would start to signal the corrective dip was done.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Reacting down overnight from the 3.02 buy signal extended through the 2.95 sell signal to attack its 2.84 target down to 2.88.