S&P
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2451.50 | 2450.50 |
| …would target | 2458.50 | 2457.50 |
| Bias-down: under | 2442.50 | 2441.50 |
| …would target | 2436.50 | 2435.50 |
| Signal status: NO-BIAS | 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)
[Market Wrap was held 30 minutes early because I had to leave the screens for Tuesday’s last half-hour.]
North Korea’s actions served as an external catalyst to accomplish what the ongoing decline was already seeking to do organically. That pushed the decline’s sponsorship to the sidelines. Happily, since being strong-handed sellers, they prefer selling into strength. Which is what they got, since no more missiles meant no reinforcements to the knee-jerk reaction selling. [Click here for a video description of that analysis.]
So, the new question is when and where will strong-handed sellers start creeping back in? Filling the gap back up to Monday’s ~2443.50 close neutralized its attraction above. But it was attacked and tested so hesitatingly as to suggest it contained enough pessimism to fuel a bigger bounce. The next higher resistance at 2448.00.was tested intraday without closing above it. And the close wasn’t back under 2438.00, which would have signaled the bounce was done.
Wednesday can still extend through the 2454.00 upper-end of last Wednesday-Friday’s range to test 2461.00. And still qualify as a correction. But gapping down Wednesday under 2438.00 would invalidate by proxy Tuesday’s recovery. Fresh lows targeting 2411.75 and sub-2400.00 would be in-play — and probably no longer offering much support.
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 Sep Contract (EC, ETF: (FXE, UUP))
Closing above the 1.1970 objective Monday extended sharply higher overnight to 1.2082. Already dipping into the open, Tuesday trended down to almost fill the gap back to Monday’s 1.1922 close. Overnight highs would like to be retested, but a deeper pullback to 1.1945 can’t be dismissed.
Gold Dec Contract (GC, ETF: (GLD))
Missiles flying always brings out the best in Gold. And having closed above 1313.00 Monday it surged through its 1322.00 target to 1332.00. Tuesday’s open was $2 off the high, and trended back down to 1319.00 pullback limit. The next lower support is 1310.50 to keep alive the near-term likelihood of retesting the overnight high.
Silver Sep Contract (SI, ETF: (SLV))
Higher highs overnight at 17.67 were backing off a little into Tuesday’s open, still short of the 17.80 target. Trending back down intraday largely held positive territory while filling the gap back to Monday’s 17.45 close.
30-year Treasury Sep Contract (US, ETF: (TLT))
The flight-to-safety trade resumed with a vengeance, extending sharply higher overnight to fresh highs at 158-04. Trending back down post-open twice stopped optimistically short of filling the gap back to Monday’s 156-23 close. The overnight high’s retest is likely so long as 156-16 holds as support.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Narrow sideways action greeted Tuesday’s session which only traded flat-to-lower through the morning. The next lower objective at 45.50 remains intact, presumably on the way to retesting the lows.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Monday’s post-open rally off of gapping down was able to test 2.98 resistance. Its reaction filled the gap back down to Monday’s close under 2.95 and recovered back to the open’s high. Almost any initial strength Wednesday would be credible for extending higher, and for dismissing the potential for a deeper pullback targeting 2.84.
Mid-day Update… Re-covered.
I’LL BE AWAY FROM THE SCREENS FOR THE SESSION’S LAST HALF-HOUR, SO MARKET WRAP WILL BE A HALF-HOUR EARLY.
If you saw my comments in the chaRTroom at last night’s Globex open, then you already know the North Korea missile launch hijacked the narrative from an ongoing decline.
Its strong-handed sponsorship prefers selling into strength. Which they knew would be coming after weak-handed sellers had finished their knee-jerk reaction to a headline.
So long as there was only one headline. Another missile or escalation would have sucked in more selling pressure.
So, opening at the decline’s 2427.25-2429.00 target was reversed up almost immediately, and mostly relentlessly. The 2433.50 bias-down target was recovered in time to avoid renewing the bias-down. Slightly premature probing above the 2439.00 bias-down signal was retraced, and then recovered to test the afternoon’s 2444.25 bias-up signal.
Yesterday’s 2434.50 area close was attacked and tested almost grudgingly. Almost pessimistically, which would be bullish from a contrarian perspective.
It’s too late to trigger bias-up, or to invalidate the afternoon’s no-bias. That won’t prevent no-bias trending above it before the bias environment begins lapsing. Remember: This is still weak-handed sponsorship, which is often excessive. Probing positive territory is likely, potentially to 2461.00 before strong handed sellers start seeing the strength they prefer selling into. Back under 2441.00 would start to signal that they aren’t waiting.
Look ahead: Economic Calendar – for Wed Aug 30, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s ADP number offers an opportunity to gauge the market’s sentiment ahead of Friday’s payrolls. And the market’s immediate reaction is likely to be duplicated by the day’s post-open reports.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
GDP
8:30 AM ET
Corporate Profits
8:30 AM ET
*Jerome Powell Speaks
9:15 AM ET
EIA Petroleum Status Report
10:30 AM ET
Farm Prices
3:00 PM ET