S&P
The First Trade & Pre-open Tour Recording… Algos forgot to re-set their clocks?
Proper context can start the day with a solid win and make all the difference.
NEW DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Thursday night’s relentless one-way rally from 2362.00 had expressed a lot of optimism ahead of Friday morning’s Employment Situation report. The news did trigger a surge up to 2376.25, but post-open action trended back down. Briefly probing negative territory down to 2359.00 coming out of the noon hour was recovered up to 2370.00 into the close. It was a second consecutive higher close, and the first in seven session not to probe under the prior session’s low.
Overnight action’s new info…
A relatively narrow 3-point range has been restrained from recovering into positive territory above 2369.00. The open’s dip had retested Friday’s last timing window low at 2365.00. Now after attacking it again, a bounce is trying to retest the overnight highs.
If, then…
The narrow overnight range is otherwise uninteresting, except that global exchanges are much firmer. The difference in character does suggest taking credibly almost any post-open rally. But more often it represents an attraction below. Which keeps with the bullish scenario that still allows for retesting Thursday’s oversold RSIs at 2351.00. Quickly probing above Friday’s late recovery high would still get a benefit of the doubt for extending, anyway, attracted to the two-week old 2377.50 gap up bar, if not also to retest the highs up to 2401.00 or even to 2415.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2367.00 would be unlikely to trigger the 2373.50 bias-up signal at 10:15. Exiting the open above 2371.25 would be unlikely to trigger the 2365.50 bias-down signal.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2377.00 | 2373.50 |
| …would target | 2382.50 | 2379.00 |
| Bias-down: under | 2369.00 | 2365.50 |
| …would target | 2364.00 | 2360.50 |
| Signal status: NO-BIAS | 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)
The relentless overnight rally up to 2376.25 was captured by the intraday open. Post-open action caged it, becoming easy prey for the afternoon’s sellers. But the afternoon’s attempt at killing the beast did not succeed. Not for lack of trying — the 2359.75 bias-down target was met. But it was met prematurely, which essentially marginalized sellers for the day.
Having been marginalized, albeit only essentially and not utterly, it was sellers’ turn to be exploited. Recovering the 2365.75 bias-down signal coming out of the afternoon’s bias environment trended up relentlessly into the close. RSIs diverged negatively into the bounce’s 2370.00 peak.
Friday was a second consecutive positive close. It was the first in seven sessions not to probe fresh lows intraday. And it creates a special setup that can launch a retest of the prior week’s highs. (I’ll describe its parameters this weekend*.)
Details and other markets coverage are discussed in the post-market Wrap recording here.
*JOIN US FOR THE SATURDAY REVIEW AT 9:30AM ET… LOOK FOR AN EARLY MORNING EMAIL WITH ITS LINK.
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))
Surging in reaction to Thursday’s ECB events went out testing the 1.0585 bounce limit. Surging Friday in reaction to payrolls probed fresh highs up to 1.0687, levels not seen in four weeks. A pullback has room down to 1.0625 before signaling the decline has resumed.
Gold Apr Contract (GC, ETF: (GLD))
Fresh lows overnight under the 1198.00 objective probed down to 1194.50 and still had potential to 1192.00. But reaction to Friday’s payrolls triggered a surge to 1206.00. The session still ranged in negative territory back down to 1198.00, still having potential to 1192.00.
Silver May Contract (SI, ETF: (SLV))
Probing overnight deeper under the 17.05 objective that was met Thursday did react up sharply to Friday’s payrolls report. But the blip-up into positive territory at 17.10 was reversed back down to fresh intraday lows testing 16.90, still a nickel off the overnight lows.
30-year Treasury Jun Contract (US, ETF: (TLT))
Choppy reaction to Friday’s payrolls report probed lower lows down to 146-13 while also bouncing briefly back into positive territory, suggesting this segment of the decline is waning.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The bounce from Thursday’s attack on the 48.55 target peaked upon testing the 50.00 bounce limit overnight and reversed back down entirely to fresh lows at 48.31. Closing above 48.55 doesn’t prevent extending to the next target at 47.25, but it does suggest the decline’s momentum is waning.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Probing even higher Friday threatened to essentially confirm Thursday’s breakout-type action above Tuesday and Thursday’s prior highs. The rally can extend to 3.15 unless a break under 2.90 were to signal the trend reversing back down.
Mid-day Update… Relentless overnight rally gone.
Bias-up environment’s lapse hasn’t been bullish.
The post-open pullback held one test of the 2365.75 bias-up signal. Then it was probed by 2 points, but only briefly as that also held through the bias environment.
Then the bias environment lapsed, and 2365.75 was no longer required to hold tests. The next test came during the noon hour, and quickly extended to test this afternoon’s 2359.75 bias-down target.
The bias-down target held its test to avoid renewing the bias-down signal. It’s still a bias-down environment, and remains vulnerable to extending down anyway. The eventual objective would be to retest oversold RSIs at yesterday’s 2351.00 low. Probably not as one leg, i.e. not as an air pocket.
This being a Friday afternoon, sponsorship for trending tends to be difficult to attract. So, recovering back above 2365.00 would start to suggest momentum is reversing up. The next higher objectives starting at 2377.50 need not be tested today.