S&P
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2455.50 | 2454.50 |
| …would target | 2462.00 | 2461.00 |
| Bias-down: under | 2447.00 | 2446.00 |
| …would target | 2441.75 | 2440.75 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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)
Monday’s choppy open had set into motion a series of conditions, each of which has developed through Tuesday’s rally. Monday morning’s temporary probe of fresh lows at 2415.75, and extending its recovery through Tuesday’s opening retest of Friday morning’s 2439.50 high, tracked the basic template. Not being rejected early kept the door open to rallying late. Which was done up to 2454.00.
Steep and relentless upside are common characteristics of counter-trending. The counter-trend’s actual size is relevant only to the leg it is correcting. So, whether rallying 38 points is a lot or a little matters far less than Tuesday retracing 61.8% of the last downleg (from Wednesday’s 2474.00 high).
Another interesting feature to Tuesday’s rally was its sponsorship. The open triggered a buy signal at 2435.00 and never looked back. There was no constructive backing-and-filling, or other tactics typically employed by a rally to refuel buyers. It’s less a characteristic of a correction, and more an accident waiting to happen.
Regardless, reversing down still requires an actual sell signal to trigger, and there’s room down to 2438.00 before confirming a new downleg is underway. Meanwhile, the corrective rally is otherwise free to extend higher, next targeting 2461.00.
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))
Already reacting down overnight, Tuesday’s open again retested the 1.1765 sell signal, which continues to behave more as a magnet than as an inflection point.
Gold Dec Contract (GC, ETF: (GLD))
Overnight weakness tested the 1288.00 sell signal before bouncing. The bounce stopped short of recovering 1295.00, which makes another dip likelier to extend down.
Silver Sep Contract (SI, ETF: (SLV))
Tuesday morning dipped deeper to test the 16.90 sell signal. Reacting up sharply held the 17.05 pullback limit as resistance, all but signaling the trend is reversing down.
30-year Treasury Sep Contract (US, ETF: (TLT))
Monday’s inside-day was followed by another Tuesday morning, even while surging stocks seemingly offset the catalyst for last week’s flight-to-safety rally.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday night’s bounce back up to 47.95 resistance was largely retraced into Tuesday’s open. But Tuesday morning’s bounce retested 47.95. Resistance held through the close, but can still resolve down Wednesday as EIA is being greeted from a position of weakness.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Surging before Tuesday’s open wasn’t extended above its 3.00 open, and reversed through the morning to 2.93, preventing a decisive close above 2.95 that would have closed the door to a deeper pullback targeting 2.81.
Mid-day Update… One-way street, in R.
Hovering at resistance.
This morning’s bias environment fulfilled the retest of Friday morning’s 2439.50 high. Actually, the open’s surge did that. The bias environment extended up to 2445.25. Rallying again at the bias environment’s 11:30 lapsing was bullish, and the noon hour extended up to 2448.50.
2448.50 is the afternoon bias-up signal. It didn’t trigger. But two reactions down were recovered entirely. Often, that resolves up anyway when the bias environment begins lapsing — whether or not durably.
This morning’s doubly-renewed bias-up target was 2446.00. So long as it holds pullbacks during the bias environment, at least an obligatory fresh high is likely. And it would likely touch 2450.75, regardless of its resolution from there. Back under 2445.00 would instead start signaling momentum already reversing down.
Look ahead: Economic Calendar – for Wed Aug 23, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: More of this week’s housing sector data are reported on Wednesday. But still nothing high-profile or reliably influential. The afternoon’s Fed speaker may be able to fill that void.
MBA Mortgage Applications
7:00 AM ET
New Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
*Robert Kaplan Speaks
1:05 PM ET