S&P
Market Wrap (recording & summary)
It took long enough. No, seriously — just long enough. Fighting back from an overnight dip to 2463.50 had opened only slightly lower at 2469.00. But the morning only dipped back down to the overnight lows. and only to the overnight lows. Firming through much of the afternoon’s bias environment to 2468.00 stopped short of recovering. But firming into the bias environment exit extended higher upon entering the final hour, probing the morning’s high up to 2470.50.
All of which could have taken less time. But it couldn’t have taken any longer and still had time to recover. It took long enough.
Had Monday’s entire pattern developed during the morning alone, then the bullish WedEX would have been fulfilled. Not optimally, since Friday afternoon had already retraced a dip, which is what Monday’s entire session did. Optimal would have been to trend up after the open’s dip. Monday morning’s thorough tests of support did hold, but the window had closed before recovering, so it did not fulfill the bullish WedEX setup.
Nevertheless, a second consecutive pullback has failed to extend down. The delay suggests that upside attractions will now be more influential, first at 2474.50 and then new highs. Extending down anyway should still begin by gapping down, or at least by triggering the morning’s bias-down, targeting at least 2458.50.
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))
Gapping down Monday to the 1.1650 target that Friday had exceeded does suggest the probe above it was a blow-off top. Meanwhile, potential to 1.1730 wasn’t fulfilled by extending Friday’s rally, suggesting that a top is now forming.
Gold Aug Contract (GC, ETF: (GLD))
Probing higher Sunday night extended Monday to within $1 of the 1259.70 target. Reacting down intraday filled the gap back down to Friday’s close, but didn’t reverse momentum down.
Silver Sep Contract (SI, ETF: (SLV))
Firming overnight helps to confirm the 16.70 target remains intact. It also enabled a gap up to help absorbe post-open selling pressure without damaging the rally’s chart.
30-year Treasury Sep Contract (US, ETF: (TLT))
Flat-to-lower ranging Sunday night extended down Monday to 154-05, but didn’t reverse the trend down, as 155-06 remains in-play.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming Sunday night needed to close back under 46.25 for optimal confirmation the reaction down remains intact, and it was still being tested into the close. Breaking lower would next target 45.15 and probably its break, too.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Having extended back under both recent gaps at 3.05 and 3.02, a retest of 2.92 became likelier. Sunday night essentially opened there and then probed lower Monday morning. Closing above 2.95 would trigger the next upleg, but closing first under 2.88 would make a recovery unlikely.
Mid-day Update… First to blink.
Still hovering at recent lows.
Friday afternoon’s retest of Thursday’s low wasn’t going to break lower, not after Friday morning had tried already and failed. That was Friday, and it was due to the “Friday Factors” which are a function of two days of illiquidity bearing down at an exponential pace. Strong-handed sponsorship isn’t changing its recently expressed opinion.
Now this is Monday. The only Monday Factor (there really are none) is that an entire week of liquidity lies ahead. Even if proved wrong later, it’s much easier to generate sponsorship. So, Thursday’s low is vulnerable again to breaking.
The vulnerability to breaking under Thursday’s low has one exception. It is that this morning’s open should have gapped down under it. But it didn’t. The vulnerability is equally matched by the vulnerability to rallying. Buyers are not marginalized.
Neither vulnerability may be exploited today. Having failed to exploit Friday’s support, the vulnerability for breaking lower would become greater. But the path down would still require gapping open under Thursday’s low (and lower). Meanwhile, breaking either end of this afternoon’s 2463.50-2459.25 bias signals before the close would be likely to trend in that direction.
Look ahead: Economic Calendar – for Tue Jul 25, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is busy, but only one item is reliable for influencing price action. That’s the post-open Consumer Confidence, which is one of three released simultaneously. Two pre-open reports being released simultaneously are both housing sector — specifically, pricing metrics, which is also a glimpse into the consumer. They can be relevant if divergent from each other, or if confirming outlier data.
Redbook
8:55 AM ET
FHFA House Price Index
9:00 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2471.75 | 2469.25 |
| …would target | 2477.00 | 2474.50 |
| Bias-down: under | 2466.00 | 2463.50 |
| …would target | 2461.00 | 2458.50 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.