S&P
The First Trade & Pre-open Tour Recording… Starting down.
Proper context can start the day with a solid win and make all the difference.
NEW 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…
Thursday’s noon hour drop fell nearly 23 points to 2457.00 at the afternoon bias environment low. This tested the “lower prior highs” and gap outstanding, singularly represented by 2458.50. They held their test, as any lower would have entered a meltdown threshold — highly unlikely during the same session that prints a new trend extreme in the opposite direction. A 16-point reaction up to 2473.00 avoided that, and also avoided closing under Friday and Monday’s 2462.75-2463.50 lows, which would have signaled a trend change.
Overnight action’s new info…
The afternoon’s recovery also closed above Friday and Monday’s 2469.00-2470.50 highs. That would have been outright bullish, except the recovery extended to test Tuesday and Wednesday’s 2473.50 “higher prior lows.” Having neutralized its attraction, Globex immediately began reversing down to 2462.25. Flat-to-higher ranging up to 2467.00 wasn’t swayed much either way by Europe’s opens. A dip to fresh overnight lows at 2461.50 (which yesterday’s last reaction down held instead of triggering a new downleg) was recovered nearly entirely back up to 2467.00, and now sits at this morning’s 2465.50 bias-down signal.
If, then…
Even the most bullish resolution would not necessarily avoid probing negative territory Friday. But most bullish scenarios must recover that probe through a relevant timing window. Invoking the Friday Factors — a short-squeeze triggered by two days of impending illiquidity — could end the week back in safe territory. Meanwhile, a Head & Shoulders pattern has begun forming. It’s not very symmetrical, but that would be offset if the ferocity of its right neckline (the plunge into yesterday’s low) were duplicated Friday, also triggered by Friday Factors.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2463.50 would likely trigger the 2465.50 bias-down signal at 10:15. Exiting the open above 2469.00 would not be likely to trigger bias-down.
Phonetic dictation…
well looks like I miss some of the fun that yesterday when I left at the final hour but we caught some good stuff some intentionally some luckily this pattern needed to extend higher we gave buyers a little benefit of the doubt that the opens Gap up even if it didn’t extend would initially would extend eventually and they didn’t give it up not through the bias environment so that benefit of the doubt went that far at least sellers were marginalized for the morning but not the afternoon which plunged through its inflection point down and Down and Down but we did catch by having working levels having levels working as to what would it ecline hit what levels couldn’t hit what would be the maximum levels it could hit hit the maximum 5850 are oversold there so they require retest eventually but all other factors said that was at like 5850 was only being overlapped at the low despite being probed by several bars lower and lower and so the calculable reaction up with 6550 that was hit that was responsive back under 6150 would signal momentum reversing down keep that in mind or 6150 would signal momentum reversing down and it was pierced it was pierced by only three tix at its lowest point and only overlapped and of course I was here at the for the final hour but the final hour did rally back that rally back recovered 61861 .8% of the the drop actually got a little bit higher the cash session Futures closed pretty much at the 61 8th was an interesting relationship here as well we get rid of ticks and get to the bid on the highs we basically have a nice little 61 Nitra Trey Smith extend 60181 relationships in here I won’t go through the mall with the point is that this was not new sponsorship that triggered the recovery that took price even higher than the 6650 then we looked at originally even the higher highs that was just a reaction it’s all part of the same leg it’s really interesting that what was avoided we’ll come back to that in a moment what was avoided was a trend change so in other words new High clothes interim dip High clothes there’s no higher hi I’m planning out a higher high subsequent to that if there were one but even the higher 108 hyzaar overnight High’s don’t do it had that interim low been broken through the clothes we’d have a trend change not only did that overnight low or I’m sorry the interim low which actually is Friday and Monday is Lowe’s not only did that hold Friday and Monday size we recovered as well know they overlapped and they not been overlap and recovered as well that would be outright bullish this wouldn’t be that I also went on to test what is a normal it’s morning where to probe lower weather that where to probe under Friday’s low or the probe negative territory whatever that might have been is what even in the most bullish inerio even in a recovery at having recovered and avoided the trend change still potential for the morning to have follow through so let’s move forward and in fact we have followed through overnight and got to a certain point it actually got to the point where I basically we’re yesterday’s bias environment had gotten to it 120 as of 1:20 bounced noticed something I talk about this every day and today I’ll say it in a different way your UPS opens didn’t influence overnight Market and as we talked about intraday that doesn’t happen you don’t reverse the trend on the same day it just doesn’t it’s why I don’t ever have a reversal signal on the same day as a trend extreme but that was yesterday for a slightly aggressive attempt to reverse the trend is repeated today it will succeed if this aggressive attempt yesterday to reverse the trend is not repeated today it won’t succeed will be looking at new highs soon enough he have a resumption or repeat that is of yesterday’s big down leg is a voided today and it can be attempted so long as it’s recovered again through email back above Lowe’s window it cetera we close lower if we close from this hype back under yesterday’s low that would be close enough to duplicate might want to get a couple points in there just for decisiveness I don’t think the market will have any problem doing that if that’s the case if it’s not rejecting yesterday’s well it is unfolding a big head and shoulders and we’ll talk about that Saturday at the Saturday review one way or the other because there’s some very specific targets the upside and of the downside if there’s no attempt to try to repeat yesterday’s decline the upside is still 2484 2490 that hasn’t changed if there is an attempt to try to repeat yesterday’s downside that does recover intraday that’ll actually give us much higher Target’s to the upside again these are levels and constructs will examine more deeply Saturday and the Saturday review but know that this is a very pivotal point alright let’s look at other markets currency 25 this can just continue eating hire 50 is it started finally natural gas and I said very very bullish Behavior yesterday both in terms of the responsiveness to the 295 by signal especially having neutralize the attraction below just the prior day and then the restrained optimism to hover here it’s not pessimism but restrained optimism just shade off of pessimism over here above 295 using 295 is support looks good looks bullish and overnight forward here overnight holding up I don’t have really any spread or and the the roll over to the front month from August to set and price to pretty much the same levels alright any questions let me know I need the recording here running late for that but I will see you at the open all right good luck today .
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2477.00 | 2474.25 |
| …would target | 2483.00 | 2480.25 |
| Bias-down: under | 2468.25 | 2465.50 |
| …would target | 2461.25 | 2458.50 |
| Signal status: LATE BIAS-DOWN | 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)
TODAY’S WRAP IS COMING ONE HOUR EARLY BECAUSE I’M AWAY FOR THE FINAL HOUR.
Thursday’s drop was impressive. Not only for size, but for its productivity. Friday and Monday’s 2469.00 “lower prior highs” were tested. And broken down to the prior week’s lower prior highs and gap at 2458.50. Breaking any lower would start to risk something much more substantial underway.
Closing under 2462.50-2463.50 would signal a trend change. It would be confirmed by not recovering that area Friday, and then require at least an eventual third lower close. Regardless, fresh intraday lows would be likely down to 2455.50 or 2451.00. Closing back above 2469.00 would suggest the drop had ended. At least, that it was bottoming. Probing negative territory Friday morning would still be possible, but likely to recover.
Details and other markets coverage are discussed in the post-market Wrap recording here (which was held one hour early today).
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))
Room for noise above the retested 1.1735-1.1755 objective at 1.1808 was met overnight by follow-through from Wednesday’s FOMC news. Closing negative Thursday would be the proverbial “canary in a coal mine” warning that USD was about to improve against the basket that has been rallying to its detriment. Thursday’s negative close does suggest a top is forming.
Gold Aug Contract (GC, ETF: (GLD))
Surging after Wednesday’s close in reaction to the FOMC news had fulfilled the 1259.70 target. It was probed overnight and Thursday morning to 1265.00. A pullback to 1254.00 held its 1257.00 pullback limit to avoid reversing down.
Silver Sep Contract (SI, ETF: (SLV))
Wednesday’s post-close FOMC news had triggered a surge to fresh highs that extended to fulfill the outstanding 16.70 target up to 16.81. Its reaction down to 16.54 tested the 16.60 pullback limit through the close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Bouncing overnight only touched the 153-16 buy signal. It was reversed in time to gap down Thursday which extended through the morning to probe Wednesday’s 152-08 low and range around it. Closing back above 152-26 would suggest a recovery is underway.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still no reversal at Thursday’s open, which now has room under 48.25 to 47.25 before signaling the trend has reversed down to retest the low’s consolidation. The rally until then is still considered only temporary, although it has held up and extended against a lot of “permanent low” talk.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Having neutralized the gap back down to Monday’s close on Wednesday, Thursday’s EIA report avoided being greeted from a position of weakness. The reaction spiked up through the 2.95 buy signal, but the session only hovered above ita.
Mid-day Update… and Programming Note.
I’LL BE AWAY FOR THE SESSION’S FINAL HOUR. MARKET WRAP WILL BE EARLY AT 2:34 ET.
My signals doubted this morning’s gap up, but I didn’t. Guess who won that duel.
Gapping up above prior highs, maintaining the gap up, and preferably extending it. These are the ingredients to rallying on the morning after buyers fail to gain traction. There are exceptions, but they’re doomed to failure. 
Despite knowing this morning’s gap up wasn’t extending above prior highs — let alone maintaining — I anticipated a shallow or brief pullback to push higher.
The pullback was neither shallow nor brief. The gap up had failed to trigger my signal, and its reaction had failed to exploit my leeway. But the 2478.00 bias-up signal triggered late, suggesting that the original scenario may be developing, anyway.
Firming through the morning to within 1 tick of the 2480.00 opening print suddenly found itself triggering a sell signal under 2477.00. And probing under the bias-down signal another 6 ticks lower. Then piercing the 2469.00 bias-down target in time to renew the bias-down signal.
And then continuing the plunge to probe under 2458.50 by 6 ticks. All of the probes were also overlapping 2458.50 which warned us the drop may be pausing.
In fact, a buy signal has triggered above 2460.75 has come within 6 ticks of its 2466.50 target. Oversold RSIs at the low require an eventual retest, and may prevent the target or any further recovery. Retesting the low may also resume the decline. There’s no guarantee that a meltdown won’t begin immediately. What I can say is that it’s unlikely to begin the same session that printed a new trend extreme.