S&P
The First Trade & Pre-open Tour Recording… Stretching the rubber band.
Proper context can start the day with a solid win and make all the difference.
NEW! Market Tour transcript included at the end of this post…
NEW DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
[Adobe upgraded last night, and I spot-checked the recording]
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
2388.00 had held overnight and pre-open tests, and Friday’s open quickly began sliding 9 points. The afternoon bias environment’s attack on 2378.00 was only a couple of points under the morning bias environment’s low. No capitulative leg formed, but neither was there an attempt to recover from the lows.
Overnight action’s new info…
Initially dipping to fresh lows at 2377.00 stopped even more quickly. The balance of the night has trended up relentlessly, eventually testing this morning’s 2385.75 bias-up signal. The overnight strength’s motivation is presumably the US government funding deal that was reportedly reached near the open.
If, then…
A capitulative break lower was never required, but neither was it rejected. At least, it wasn’t rejected through Friday’s close. Overnight action is threatening to reject the capitulation setup, by proxy of gapping up above Friday’s morning bias environment. One challenge to a recovery is extending higher post-open. But, first, two other challenges — relentless one-way overnight trending is often reversed at the open, especially when that overnight action greets the new week. Gapping up and extending higher anyway would still face its ultimate challenge at 2388.00 resistance, whose recovery would target new highs. Resuming the decline by capitulation or otherwise would next target 2374.00 and 2371.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2388.00 would be likely also to trigger this morning’s 2385.75 bias-up signal at 10:15. Exiting the open under 2383.50 would be unlikely to trigger bias-up.
Phonetic dictation…
[NEW! Unreviewed voice-to-text real-time dictation of the Market Tour recording. Again, not reviewed or edited in any way, which can be equally confusing and humorous.] good morning good morning and welcome it is Monday welcome to the money market to her at all so may welcome to may may one made a not a distress call there’s Lauda as we talked about the Saturday review out of exchanges that are markets closed today and through the week throughout the week so it’s difficult to get trending going which is good for trying to form a extreme if that extreme tries to form and fails and it’s likely to fail because I’m likely to fail because of the trying to format Friday morning side doesn’t itch or extending higher has to be maintained through the opening 15 minutes overnight 809 that we started looking at concessions of trending down addition to which days with one possible exception which is allowable of consecutive lower closes the up/down crash coming into view long but this first of all the couple days into Friday’s open the couple days prior to Friday’s open just want a cumulative backing and filling with a lower objective outstanding Friday’s Gap download Provo didn’t extend down and instead the balance of the session ended up to neutralize that attraction outstanding without closing but the prior hydra vs. forgiven 5312 at the very least 5121 22
Special chaRTroom link tonight…
A couple of interesting statements were made Sunday. The White House is announcing another healthcare vote coming Wednesday. And Pelosi is saying Democrats can negotiate halfway on the top corporate tax rate. We’ll soon see whether the market likes what it heard, or doesn’t believe any of it. (It can be both, just not in tandem.)
Adobe has pre-scheduled maintenance overnight, so we’ll be using the Anymeeting service as back-up. The chaRTroom opens at 6:00pm ET… Note: The Adobe link will change (sporadically), so log-in tomorrow morning from The First Trade blog post’s link.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2389.25 | 2385.75 |
| …would target | 2395.00 | 2391.50 |
| Bias-down: under | 2380.75 | 2377.25 |
| …would target | 2374.50 | 2371.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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)
Friday’s session didn’t include a capitulative leg. The morning’s 9-point decline was contained, so it doesn’t qualify. The afternoon only ranged flat-to-lower. And the session doesn’t qualify very well as retesting Thursday’s low. Friday morning’s bottom was too high, and the afternoon’s shallow lower low was too late.
So, a capitulative break lower remains possible.
Objectives below haven’t changed, the likeliest being 2374.00 and 2371.50. The residual downside could be neutralized instantaneously Monday by gapping down to fulfill either objective. Counter-trend sponsorship tends to find that very attractive, when an entire week lies ahead. Gapping up Monday could be credible for resuming the rally without any further pullback.
Details and other markets coverage are discussed in the post-market Wrap recording here.
I’ll send reminder and links to this weekend’s Saturday Review early in the morning.
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))
Friday’s gap up remained withing Thursday’s range, and within the orbit of this week’s high, which is likely to be retested before a substantial reversal down can trigger under 1.0860.
Gold Jun Contract (GC, ETF: (GLD))
Friday’s shallow firming still qualifies as the third consecutive session of ranging narrowly sideways, which is not in itself relevant, except for developing at recent lows. At least a blip-down or some other probe of fresh lows is likely to precede a credible rally effort.
Silver Jul Contract (SI, ETF: (SLV))
Friday was the fourth consecutive trending session to probe fresh lows intraday, approaching a relevant support at 17.09. More significant is the ten consecutive sessions of trending down, forming a potential Up/Down-crash setup.
30-year Treasury Jun Contract (US, ETF: (TLT))
The prior two choppy sessions were not accumulative, as proved by Friday’s dip piercing Tuesday’s prior low down to 151-28. That still short of the pullback’s 151-22 objective. Its reaction up filled the gap back up to Thursday’s close, already neutralizing its attraction above. A lower low remains likely so long as 153-10 isn’t recovered first.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s retest of the original rally’s 48.90 buy signal held at its 49.30 confirmation Friday, still needing to to close above Thursday’s high and 50.00 to signal momentum reversing up.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping back up Friday to test Wednesday’s highs was unable to resume Tuesday’s surge, despite already having blipped-down in reaction to Thursday’s EIA report.