S&P
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2368.00 | 2366.00 |
| …would target | 2374.00 | 2372.25 |
| Bias-down: under | 2358.50 | 2356.75 |
| …would target | 2353.75 | 2351.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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)
Tuesday’s open was greeted by largely bullish holiday price action that launched a gap up 2 points above last Wednesday’s high to 2353.00. Assisting the trend was a bullish WedEX that had been influential Friday afternoon. Extending sharply higher renewed the 2355.00 bias-up signal through its 2361.00 bias-up target, putting into play 2365.00-2366.00. Which was attacked to within 1 tick.
RSIs were no longer simultaneously overbought when the morning’s peak was reversed 9 points down to 2355.75. Firming through the afternoon bias environment then rallied through the close to pierce the morning’s high by 1 tick. The 2365.00-2366.00 target was barely touched, but it was touched.
And apparently, the target was also neutralized. RSIs had diverged negatively at the late high, facilitating a last-minute dip down to 2363.50 at the cash session close. Futures extended lower to attack 2358.00. Not at all shallow, but still too little and too late to be predictive of a resolution. Nevertheless, it is certainly reflective of the atmosphere up here. And a reminder that there is no “unfinished business above” to inhibit reversing down.
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))
Gapping down Tuesday filled the gap back to the low’s open, which was likely regardless of its resolution. Bounces must now hold 1.0605 to maintain the 1.0470 target.
Gold Apr Contract (GC, ETF: (GLD))
Gapping down sharply Tuesday to what had previously been the 1229.00-1230.00 buy signal quickly bottomed and the morning recovered entirely back up to 1240.00, filling the gap back to Friday’s close and neutralizing its attraction above. Closing above 1243.50 would target 1259.00, but there is otherwise no requirement to rally any further
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s gap down to 17.85 support was recovered entirely through the morning back up to above 18.00 to neutralize the attraction back to Friday’s close. A higher close Wednesday would keep alive the potential for fresh highs still targeting 18.18.
30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping down Tuesday to 150-19 was recovered entirely and reversed into positive territory before noon to 151-23. Its reaction down struggled to hold the 151-11 bounce limit as support.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh relative highs overnight triggered a gap up Tuesday above 54.65 to touch 55.00, which would next target 55.60 where a much more significant directional decision would be made, But the break wasn’t maintained, so it now relies on a second consecutive higher close Wednesday to confirm.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Trending down overnight extended the decline to fresh lows, gapping down Tuesday to 2.80 and trending down another dime. Bounces have room up to 2..83 without even threatening to reverse momentum up.
Mid-day Update… Is a big leg brewing?
REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.
Persistently overbought 3-minute RSI kept alive this morning’s rally. It ultimately came within 1 tick of the 2365.00-2366.00 renewed bias-up target. Close enough for hand shoes and horse grenades. But a loose end, if left outstanding.
The high doesn’t require being retested. The 3-minute RSI’s persistence had already broken, dipping momentarily out of overbought territory. And its 1-minute RSI was at best on the cusp of being overbought. But the burden of proof is on sellers, because the open’s rally wasn’t rejected through two timing windows — a downdraft could still recover.
In fact, there was a downdraft. It hasn’t extended, nor has it recovered. The highs formed a head & shoulders that triggered a sell signal under 2360.25, and met its minimum 2357.25 target down to 2356.00. A relatively narrow 2-point range between 2358.00-2360.00 defined the noon hour.
Breaking higher would set-up an important test of the morning’s high. Closing above it could turn this rally’s slope exponential. More exponential. Breaking back under “lower prior highs” would trigger a steep and deep drop, albeit only temporarily.
Look ahead: Economic Calendar – for Wed Feb 22, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday afternoon’s FOMC Minutes often inhibits price action before its release. Lately, it hasn’t had much effect in reaction to its release. But affirming or contradicting last week’s Yellen testimony could be impactful.
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
Existing Home Sales
10:00 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
*FOMC Minutes
2:00 PM ET