S&P
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2351.00 | 2349.00 |
| …would target | 2356.25 | 2354.50 |
| Bias-down: under | 2343.75 | 2342.00 |
| …would target | 2337.50 | 2335.50 |
| 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)
Expiration has likely exacerbated the rally’s productivity. Yellen’s testimony and Trump’s fiscality were only catalysts. The rally’s breakout was broad-based and organic, but now five days later it is more influenced by the mechanics of expiration.
Wednesday duplicated Tuesday’s opening weakness and intraday recovery to new highs in the afternoon. More so, the afternoon bias environment’s highs were probed during the final hour. The three prior sessions gapped up and extended higher only to an afternoon bias environment high. And Wednesday produced the rare double occurrence of no-bias trending.
So, optimism is improving through the day instead of waning, which is potentially bearish from a contrarian perspective. Also, the rally’s sponsorship is increasingly event-based, much more temperamental than organic accumulation. And weak-handed sponsorship is impatiently pushing the afternoon’s higher.
Gapping up again Thursday would once again be vulnerable to a morning of backing-and-filling, as would gapping down — the afternoon’s rally above its 2342.25 bias-up signal was no-bias trending that requires being retraced, potentially down to its 2341.00 1:20 print. Extending higher relentlessly anyway would next target 2366.00 — and if met Friday morning, the bullish WedEX could invert down.
Meanwhile, the WedEX signal triggered actively bullish, easily. Price action is likely to be biased up into and out of the weekend, Friday afternoon and Monday morning. Thursday’s open won’t be able to affect the setup in this particular instance.
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 Wednesday to a fresh low would have suggested the 1.0570 target met Tuesday will next target 1.0470. But bouncing back into positive territory tested the 1.0605 bounce limit. A new low close Thursday would avoid forming a bottom.
Gold Apr Contract (GC, ETF: (GLD))
Probing relatively lower to 1217.50 was recovered Wednesday to once again probe above 1229.00-1230.00, this time to test 1234.00, potentially launching a retest of 1242.00 above, and possibly also extend to 1259.00.
Silver Mar Contract (SI, ETF: (SLV))
Shallow overnight weakness was holding prior lows at Wednesday’s open, keeping enough of the upside momentum intact to at least attack 18.18, still targeting 18.18.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending down sharply Wednesday morning to fresh lows at 149-16 all but ensures that the originally sealed top is back in-play, following the brief but substantial detour.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down slightly didn’t greet Wednesday’s EIA report from a position of strength or weakness, still being in the middle of an ongoing range that has no consistent indications of accumulation or distribution.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Rallying sharply overnight suggests the 2.91 target finally met Tuesday did satisfy all remaining relevant selling pressure. But gapping up was not the appropriate start to a recovery. Thursday’s EIA report is being greeted from a position of strength, although an initially negative knee-jerk reaction down can’t be discounted.
Mid-day Update… Way to go, Dallas!
Trump picks up Yellen’s slack to trigger surge.
Great scene in Hunt for Red October, when it is saved from guided torpedoes by submarine Dallas attracting them away. President Trump played a similar role this morning by touting massive tax cuts,
after Yellen’s comments fell flat as was expected.
The 2336.50 bias-up signal had been attacked, but not touched before reacting down to 2333.00. No-bias triggered, but no downside was required, and sellers weren’t gaining control. This increased the potential for no-bias trending, targeting at least the 2340.00 overnight high. A probe higher did begin, and extended to touch 2343.00.
No-bias trending requires a retest of the un-triggered bias signal. Plunging into the bias environment exit came within 2 ticks of the morning’s 2336.50 bias-up signal. Its attraction below is now neutralized. It was quite a novelty — and perhaps foretelling — having “unfinished business below” for a change.
Overbought RSIs at the 2343.00 high still require a retest, which is being threatened now. The 2342.25 bias-up signal held two tests to avoid triggering. So, probing any higher could also be no-bias trending, and it would also be doomed to failure. Back under 2338.00 at any time would point back down.
Look ahead: Economic Calendar – for Thu Feb 16, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No Fed speakers are scheduled for Thursday or Friday, after front-loading the week with them. But high-profile and infulential reports will be judged tghrough the prism of their outlooks. This includes mostly the Philly Fed survey, which is the only Fed survey that is reliably influential to price action — and potentially an even greater catalyst this week, being released simultaneously with two other relevant reports.
Housing Starts
8:30 AM ET
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
30-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET