S&P
Post-open Review… Digging out.
Draghi spoke, futures spiked.
Structurally, the overnight pattern tracked another bottoming template by probing under Tuesday night’s 2356.50 low. Opening back above yesterday’s lows essentially isolated the probe to the overnight.
Calculably, fresh lows touching 2354.50 would have been optimal before rallying. But not necessary — there is no unfinished business below.
And there’s no new unfinished business above. The 2366.50 bias-up signal was not touched. So, it didn’t trigger and it wasn’t rejected. The bias-up signal should defined the morning’s upper-end if it is tested.
Exceeding the 2366.50 bias-up signal through 10:30 would invalidate the no-bias that triggered at 10:15. A rally would then be credible. Probing it after 10:30 could extend higher, too, but as no-bias trending which is doomed to failure.
The only other bullish template would simply slow-play the recovery. Hovering at post-open highs until the bias environment begins lapsing would then be postured to extend higher into the afternoon.
Back under 2360.50 would instead start to suggest fresh lows — e.g. 2354.50 — are in-play.
The First Trade & Pre-open Tour Recording…
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…
REMINDER: The ES front-month rolls forward at Thursday’s open to Jun, which is trading at a 3.00-3.25 discount to Mar. So, Tuesday night’s low touched relevant support at 2356.50 (basis Jun, 2359.50 basis Mar). The bias parameters are quoted in Jun… Yet more fresh lows had been probed Tuesday night, to the next lower objective at 2356.50 (basis Jun, 2359.50 basis Mar). Rallying from there isolated the probe under Tuesday’s lows to the overnight, opening back above Tuesday’s lows at 2367.00. But extending another 3 points higher held the bias-up signal instead of triggering it. The balance of the session trended back down to 2357.75 into the close.
Overnight action’s new info…
Tuesday’s last pattern had resembled an inverted Head & Shoulders, which I had dismissed for its undeveloped head and oversold RSIs. Ranging flat-to-higher overnight did attack 2364.00, but that has been reversed to probe back under yesterday’s late lows down to 2356.75. That’s 1 tick short of touching Tuesday night’s low.
If, then…
Are five consecutive sessions of lower lows about to break through six consecutive sessions of lower prior highs? Retracements often test lower prior highs before resuming the trend. That’s usually done within 1-2 sessions. But the last three sessions have been testing those lower prior highs, reacting up only temporarily. And now Tuesday’s night’s low is likely to be probed by a couple of points. Suddenly plummeting Crude Oil has been influential, as has been anxiousness ahead of this morning’s ECB rate decision / Draghi press conference. My Crude Oil targets are still lower, but a corrective bounce should begin by this afternoon. And the ECB event is likely to be benign, so getting it behind us could be a relief — as in relief rally. But look out below if not, and if early selling isn’t easily absorbed.
First Trade…
[Click here to view the Bias parameters] NOTE: I’ve lowered the bias-down target, and recalculated the SPX spread… Exiting the open at 9:45 above 2356.50 would be unlikely to trigger the 2355.25 bias-down signal at 10:15. Exiting the open under 2354.50 would be likely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2370.00 | 2366.50 |
| …would target | 2375.50 | 2372.00 |
| Bias-down: under | 2358.75 | 2355.25 |
| …would target | 2353.50 | 2350.00 |
| 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 ES front-month rolls forward at Thursday’s open to Jun, which is trading at a 3.00-3.25 discount to Mar. So, Tuesday night’s low touched relevant support at 2356.50 (basis Jun, 2359.50 basis Mar).
Wednesday afternoon’s dip touched the morning’s 2360.75 bias-down signal, which had become “unfinished business below” that morning. Tuesday morning’s unfinished business above remains outstanding at 2374.25. The next higher objective would be to test last Wednesday’s 2378.50 opening gap up. Retesting last Wednesday’s high would have room for noise up to 2402.50.
Extending higher from this pattern remains possible. Less possible Thursday than it was Wednesday and Tuesday, which had closed back within their prior sessions’ lows. Wednesday did not, instead trending down to 2357.75 before the close. However, overnight lows held the late attack.
Having trended down essentially into Wednesday’s close, gapping up Thursday above Wednesday afternoon’s ~2369.00 bias environment high could form a “session-long rally” setup. is meanwhile chipping away at the support of “lower prior highs.” Another fresh low at 2354.25 could still be absorbed through a timing window’s exit. But that’s so far from optimal, it might as well be a sell signal.
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 Mar Contract (EC, ETF: (FXE, UUP))
Breaking lower Wednesday probed uptrending pivotal support and its parallel uptrend line off the low, still needing a second consecutive lower close to confirm 1.0470 is in-play.
Gold Apr Contract (GC, ETF: (GLD))
Already slipping yesterday under the 1218.00 target, Wednesday extended down to the 1209.00 objective. Its second consecutive lower close under a multi-session range requires at least an eventual third lower close. Also, the next lower objective is 1198.00-1199.00.
Silver May Contract (SI, ETF: (SLV))
Probing Wednesday under the .17.55 target that was met at Tuesday’s lows has essentially put into play 17.05. A second consecutive lower close also puts into play at least an eventual third lower close
30-year Treasury Jun Contract (US, ETF: (TLT))
Tuesday’s narrow ranging at the week’s lows all but required extending the decline aggressively without delay, which Wednesday’s gap down did. Bounces must now hold 148-04 to maintain the next lower objective under January’s lows.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s gap down rejected Tuesday’s retest of the 53.58 sell signal as resistance. This was despite having neutralized the attraction below by filling the gap back at Monday’s close. Extending down anyway suggests sellers are strong-handed, and next targeting 48.55 and 46.25.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Tuesday’s gap down into the 2.83-2.86 sell signal may have been only a warning shot, as Wednesday’s open gapped up into Monday’s range. The gap back up to Monday’s close was filled back up to 2.90 and extended higher intraday to Monday’s 2.95 high, neutralizing its attraction above. Thursday’s EIA report isn’t being greeted from the position of strength that is otherwise suggested by sitting at recent highs.