S&P
Market Wrap (recording & summary)
Tuesday gapped up thanks to an overnight rally. That rally had begun late enough to have been single-minded and relentless and prone to the open reversing. And that rally had begun early enough not to have been the product of weak-handed latecomers that patient sellers the open often easily absorbs. It was the Goldilocks rally. It was just right.
Which was wrong.
The gap to 2397.75 didn’t extend immediately. Not until after the opening 15 minutes of volatility had lapsed, when it surged to 2400.00 into the top of the hour. And held. The morning’s bias environment then slid to unchanged. The noon hour slid, too, probing negative territory, which the last half hour’s slide probed 1 point under Monday’s 2389.75 low.
That’s 11 points intraday high to low. A lot of selling pressure to expend through multiple timing windows, just to travel from one end of the range to the other. Sunday night’s open wasn’t the most inflated balloon, and its reaction down has been relatively shallow. Now a lot of ballast has been dumped.
Breaking lower at Wednesday’s open or overnight would still be credible for extending much more substantially intraday. Otherwise, could new highs finally extend Wednesday?
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))
Tuesday’s lower lows approached the pullback’s potential to 1.0865. Almost any initial strength Wednesday would be likelier to fill the gap back up to Friday’s close.
Gold Jun Contract (GC, ETF: (GLD))
Fresh lows overnight resumed the decline Tuesday, still targeting fresh lows at 1206.00-1211.00.
Silver Jul Contract (SI, ETF: (SLV))
Breaking lower overnight gapped down Tuesday to resume the decline that is still targeting 15.95.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday’s close was still overlapping prior intraday lows to confirm that sellers aren’t strong-handed, but not that buyers aren’t patient and awaiting the next lower objective at 150-22 before recovering. Fresh lows overnight did extend down to 150-19. So, closing above 150-22 Tuesday and not confirming with a second consecutive lower close Wednesday would be in-line with a bottom beginning to form.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight strength had attacked Sunday night’s ~47.00 high before Tuesday’s open. Intraday action only ranged narrowly sideways ahead of the post-close API report, and Wednesday morning’s EIA.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Firming overnight continued to reflect optimism, probably ineffectual, although it was relatively large up to 3.24. Back above 3.27 would undermine the outstanding objective of probing under 3.11.
Mid-day Update… Easy as 1, 2, 4.
Fresh highs retrace to unchanged, and momentarily lower.
The open touched 2400.00 to probe the highest intraday highs ever — 1 point above Friday’s post-close high, 2 points above Friday’s futures close, and 4 points above Friday’s cash session close. Also, almost 4 points under Sunday night’s high, and 5 points under the minimum objective.
So close. Too close? We already know the next higher objective(s) will be extra vulnerable to completing the rally, and to reversing the trend back down. Attracting new sponsorship to reach fresh highs should be difficult at this stage, and it is. Touching 2400.00 didn’t attract buyers, at least not enough to offset the reaction down into negative territory.
Touching 2392.00 after the afternoon bias environment had begun tried to invalidate not triggering the 2393.75 bias-down signal. I’m not giving that any benefit of the doubt. A fresh low could still test 2391.00 where a recovery would still be likely. But back above 2395.75 would start suggest the pullback was already ending.
There’s still room down to 2390.00 before suggesting something bigger underway, up from 2388.00. Buyers aren’t marginalized for the day, especially so long as dips are relatively shallow, and unable to probe much into negative territory.
Look ahead: Economic Calendar – for Wed May 10, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The Atlanta Fed report is high-profile, but has no track record for influencing price action. Wednesday morning’s other reports have neither characteristic. Noon’s Fed speaker also spoke Tuesday, so the market will anticipate his comments.
MBA Mortgage Applications
7:00 AM ET
Import and Export Prices
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Eric Rosengren Speaks
12:00 PM ET
10-Yr Note Auction
1:00 PM ET
Treasury Budget
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2403.00 | 2399.00 |
| …would target | 2403.75 | 2405.00 |
| Bias-down: under | 2397.50 | 2393.75 |
| …would target | 2392.00 | 2388.00 |
| 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.