S&P
Post-open Review… BIAS-UP.
Relentless post-open firming pierces overnight high.
The relentless overnight rally from 2915.50 had gotten to 2932.50.
Its reaction down extended to 2921.00 before the open, and another 2 points lower post-open. It took several minutes, but a wide 5-point opening range resolved up.
And up. Overnight highs were just pierced by 1 ticks. The 2929.75 bias-up signal has triggered. And the 2936.50 bias-up target is in-play.
Stair-stepping higher out of the open’s range is a difficult pattern to reverse. At least, not before some sort of topping were to develop. Simply breaking lower would otherwise be likely to recover.
Meanwhile, recovering back up into 2930.00-2934.00 isn’t “half the battle” to recover, it is a separate battle. Exiting the bias environment above 2935.00-2936.00 would help to resume the post-open recovery into something more substantial.
The First Trade & Pre-open Tour Recording… Big, and almost enough.
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…
Excessive optimism preceded Wednesday’s open, from surging at Tuesday’s close on AAPL’s earnings to producing a “new Globex trend extreme” overnight. The 2961.25 overnight high qualifies as a “New Globex trend extreme” requiring eventual intraday retest. None of which prevented the 2954.25 open from cycling down to 2943.50 at the noon hour’s low, with an interim bounce up to 2956.00. Even that had stopped optimistically short of fulfilling Tuesday’s unfinished business below at 2941.50. The FOMC policy statement reaction bounced back up to 2956.00, but no higher. The Fed Chair Q&A reaction was quite different, reacting down to 2939.00 through the bias environment exit. Consolidating there broke lower again through the last half-hour, collapsing to 2924.50 at the cash session close and 2921.00 before settlement.
Overnight action’s new info…
Just closing under 2935.00 or 2930.00 would have been a compelling hold-short, likely to gap down to 2919.00. So much of that potential had been borrowed already before the close to make it no longer compelling, creating potential for a bounce. Post-close action did probe 2919.00 down to the 2915.50 Globex action. Trending up relentlessly since then touched 2932.25. A blip-down to 2925.00 just snapped back up to 2929.00.
If, then… (notes to accompany the Tour recording)
Recovering 2930.00-2934.00 is big, but not quite a rejection of the overnight break. Big, because the probe under Tuesday’s 2926.00 low could be isolated away from intraday action, for which there was otherwise no bullish reason to probe. That’s not enough to reject the break, but it helps position the open to extend the overnight recovery up to 2949.75-2950.50. And revisiting the 2950.00 area should include a retest of 2956.00, whose resistance is probably no longer influential enough to prevent retesting Tuesday night’s 2961.25 “new Globex trend extreme.” Otherwise, containing the 2930.00-2934.00 bounce and resuming the decline would next target 2910.00-2911.00, a very difficult level to recover from.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2931.50 would be likely to trigger the 2929.75 bias-up signal at 10:15. Exiting the open under 2927.25 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2928.00 | 2929.75 |
| …would target | 2934.75 | 2936.50 |
| Bias-down: under | 2916.50 | 2918.50 |
| …would target | 2909.25 | 2911.25 |
| Signal status: BIAS-UP INVALIDATED | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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)
Wednesday was greeted by multiple instances of excessive optimism that I detailed in the pre-open Market Tour. None of which would necessarily prevent retesting the 2961.25 overnight high’s “New Globex trend extreme.” But they did. The high was only attacked again intraday to within 5 points. Twice.
Monday’s “unfinished business” above at 2954.25 had been met overnight, but it was also Wednesday’s open. A couple of big downlegs eventually touched 2943.50 at the noon hour’s low — stopping optimistically short of Tuesday’s unfinished business below at 2941.50. Down 20 points from the overnight high, and still showing signs of optimism.
Greeting the FOMC policy statement from just above 2949.50 was likely to extend in that direction, and returned to the morning’s 2956.00 high. Despite probably being only obligatory resistance, it was still resistance. And its test coincided with the Fed Chair’s Q&A, which evoked quite a different sentiment — reacting down 17 points to 2939.00.
A compelling hold-short would have been considered on a close under 2935.00 with the likelihood for gapping down to 2919.50. But the close had dropped already to 2924.50, reversing the odds. Post-close action has already extended down to 2916.00.
A lot can happen overnight. Recovering 2930.00-2934.00 would be big, but a retest of Tuesday night’s highs requires recovering 2949.75-2950.50. If this were Friday, then extending down sharply intraday would be very likely, but it’s at least still possible. There’s room down to 2910.00-2911.00 without yet falling over the edge, but it’s a very difficult level to recover from.
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 Jun Contract (EC, ETF: (FXE, UUP))
Wednesday continued extending higher, probing the 1.1280 “higher prior low” to test the Falling Wedge’s downtrending resistance at 1.1300 up to 1.1310. Backing-and-filling would be normal in the process of forming a more durable bottom. The FOMC reaction started the process, collapsing back down to the Wedge’s 1.1240 lower-end.
Gold Jun Contract (GC, ETF: (GLD))
Gapping down Wednesday between Monday’s close and Tuesday’s gap up remained within Tuesday’s range throughout Wednesday. Spiking up after the close in reaction to the FOMC policy statement attacked the week’s highs up to 1289.00. Reaction to the Fed Chair’s Q&A collapsed back down to and through session lows to test 1280.00.
Silver Jul Contract (SI, ETF: (SLV))
Wednesday gapped back down to and through Tuesday’s 14.83 low, extending to fresh lows at 14.70, before the FOMC policy statement reaction bounced back up to 13.82. That was still under the morning’s lows and Tuesday’s low. Reaction to Powell’s Q&A fell back to 14.70.
30-year Treasury Jun Contract (US, ETF: (TLT))
“Higher prior lows” at 147-22 and the 147-24 gap fill that were tested Friday were retested at Wednesday’s open and probed up to 148-11 ahead of the afternoon’s FOMC events. Holding up through the Policy Statement was retraced during the Q&A, allowing the sell signal to be raised to 147-04.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s reaction down from its open’s premature test of the 64.35 buy signal was extended down Wednesday to 62.75, allowing the buy signal to be lowered to 63.75,which was attacked into Wednesday’s close.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Flat-to-lower overnight ranging was recovered in time to gap up Wednesday to and then through Friday and Tuesday’s 2.60-2.61 highs, extending a couple of cents higher to greet Thursday’s EIA from a position of strength.