S&P
Market Wrap (recording & summary)
Friday afternoon’s behavior seemed at first to have forgotten about the bearish WedEX influence. The bias environment was entered just above the noon hour’s entry. Bias-up triggered. And higher highs were probed. If not for a headline (Russia probe reaches current White House official), then perhaps the session’s uptrend would have extended.
But the headline’s reaction plunged 10 points. More important, the reaction wasn’t retraced back up, not meaningfully, and not above the noon hour’s entry. So, the bearish WedEX was productive.
Was it WedEX, or was it the headline? The reaction down could have been retraced, at least to close back above the noon hour’s entry. Weak-handed sponsorship would have been absorbed. But this dip was suppressed into the close.
Gapping open Monday above Friday afternoon’s high would serve by proxy to undermine the bearish WedEX, and separately also form a “session-long rally” setup. Gapping up, and trending higher through the open. Otherwise, regardless of “unfinished business above” now outstanding at 2389.50, bearish WedEX is likely to be more influential Monday morning.
Details and other markets coverage are discussed in the post-market Wrap recording here.
REMINDER: I’ll email this weekend’s Saturday Review link in the morning, it starts at 9:30am ET.
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))
Thursday’s dip that filled the gap back to Tuesday’s close had held its support. Rallying overnight gapped up to and through Thursday’s high to probe fresh highs. There is no reversal signal.
Gold Jun Contract (GC, ETF: (GLD))
Rejecting Thursday’s intraday probe above the 1261.50 “higher prior low” had only signaled upside momentum was lapsing, but not that it was necessarily reversing down. Friday’s narrow ranging didn’t fill that void.
Silver Jul Contract (SI, ETF: (SLV))
Rallying overnight more than a dime above 16.75 resistance had stopped several cents short of touching Wednesday’s Island. Still, closing back under 16.75 and lower would be helpful confirmation that the reversal down is in-play.
30-year Treasury Jun Contract (US, ETF: (TLT))
Maintaining the rally’s momentum requires holding the 153-11 pullback limit, which was attacked to within 1 tick Friday morning. There’s still room for a lower low at 152-26, but that wouldn’t be optimal for resuming the rally in the near-term.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Two separate nights’ dips to 48.05 had been recovered up to 49.50 before extending higher to attack 50.50 Friday. The gap up helps to prevent immediately reversing the trend back down, but a second consecutive higher close Monday is still needed to suggest a durable breakout is underway.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Friday’s gap up to and through 3.21 reached resistance at 3.27, which has no bearish excuse not to reject without further delay and to resume the decline targeting 3.11 and lower.
Mid-day Update… WedEX disproving ground.
No signs yet of a bearish influence.
Trick question: What do we call a bias-up signal that is triggered by only 1 point? …Answer: Bias-up.
The WedEX influence begins sometime between noon and 1:30, i.e. the morning’s bias environment and noon hour fully lapsing. This window began at 2383.00 and extended up to 2386.50. Its reaction down to 2383.25 was recovered in time to trigger the 2383.75 bias-up signal at 1:20.
Triggering bias-up is in conflict with this afternoon’s bearish WedEX influence. Back under 2383.75 at 1:30 would have invalidated bias-up signal. Too late for that. Reversing down anyway under 2382.50 would still be credible for extending down and behaving bearishly, regardless of it leaving “unfinished business above.”
Closing above the 2383.00 noon hour entry, and the 2385.50 1:30 print, would invalidate the bearish WedEX. Reversing down hard from testing the afternoon’s 2389.50 bias-up target would be possible, but that pattern isn’t likely on a Friday afternoon. A successful bearish WedEX would more likely ignore the afternoon’s bias-up signal.
Look ahead: Economic Calendar – for Mon May 22, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The week starts off slowly with only a regional Fed survey, and not one known for influencing price action.
Chicago Fed National Activity Index
8:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2385.25 | 2383.75 |
| …would target | 2390.75 | 2389.50 |
| Bias-down: under | 2377.25 | 2376.00 |
| …would target | 2371.75 | 2370.25 |
| Signal status: BIAS-UP | 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.