S&P
Mid-day Update… It’s time to resolve this.
If weak-handed selling absorbed, then strong-handed buying should begin.
Monday morning’s pullback fulfilled its 2351.50 potential. And that was just during the morning. The origin of the move and its timing suggested its sponsorship was weak-handed. That didn’t prevent probing a little deeper to 2347.50 as the noon hour began. But its timing also suggested weak-handed sponsorship.
Suggesting weak-handed sponsorship is all we have, until the close. There are still some clues — like isolating the deeper dip to the noon hour, and like triggering the afternoon’s 2355.75 bias-up signal. Probing this morning’s high would be a clue, too, but only 2360.00 is being tested,
The final clue would deprecate the suggestion, by closing above Thu-Fri ~2361.00 prior highs. Now entering the final hour just under it, simply ranging flat-to-higher for an hour seems unlikely. This afternoon’s 2362.75 bias-up target is now “unfinished business above.” Add it to 2364.50.
Back under 2356.00 would suggest another downdraft underway, potentially undermining that sellers have been weak-handed. Otherwise, fresh highs today remain possible, if not also likely.
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 afternoon’s fresh lows made fresh lows likely Monday, too. They were probed only briefly before closing positive to suggest a near-term bottom is forming. Closing higher Tuesday could avoid extending down to 1.0550.
Gold Jun Contract (GC, ETF: (GLD))
Fresh lows Sunday night retested the original 1252.00 buy signal as support. Geopolitical unease triggered another surge attacking the 1262.00 resistance — which held — whose recovering would signal the rally had resumed.
Silver May Contract (SI, ETF: (SLV))
Friday’s plunge was extended a little deeper overnight, avoiding a second consecutive lower close while still testing 17.90 support. But the 18.20 inflection point must still be recovered to signal momentum is already reversing up.
30-year Treasury Jun Contract (US, ETF: (TLT))
Testing and teasing the 151-12 sell signal Sunday night ultimately produced a shallow bounce Monday morning, probably enabled by a flight-to-safety among geopolitical unease. There is little reason to further delay a break lower.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Mid-East concerns enabled the rally to extend to within 40 cents of its minimum 53.55 target Monday. There is no pullback limit to keep the target in-play, but a pullback to 50.65 would be likely next if Tuesday were to probe any fresh high intraday and close negative.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Still no reliable pattern yet formed, as Monday morning weakened a little back into the recent range.
Look ahead: Economic Calendar – for Tue Apr 11, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday morning’s JOLTS might be interesting. Friday’s government report on payrolls differed from Wednesday’s ADP number. The deviation was attributed to different polling questions, but it will be interesting if JOLTS strays, too.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
*Neel Kashkari Speaks
1:45 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2359.00 | 2355.75 |
| …would target | 2366.00 | 2362.75 |
| Bias-down: under | 2352.25 | 2349.00 |
| …would target | 2347.25 | 2344.00 |
| 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.
Post-open Review… Up is the new down.
Opening surge marginalizes sellers. Sort of.
If the open wasn’t already in decline, then the market is likely bottoming. Not necessarily rallying, but at least attracted up to 2364.50 instead of down to fresh lows.
And that’s regardless of having surged from the 2354.00 open up to 2360.00, and then already eking higher to test 2363.00. If anything, such aggressive behavior so quickly from essentially unchanged is ripe for retracement — it attracts more impatient weak handed buyers than patient strong hands.
So, as we discussed during this weekend’s Saturday Review, the bigger picture points up. But now a lot of room has been created to absorb selling pressure without it damaging the chart, which a healthy rally would likely exploit. It’s not required, but a pullback to 2355.75 or 2351.50 can’t yet be dismissed.