S&P
Post-open Review… Sellers balk.
Pre-open and post-open selling is absorbed.
REMINDER: I WILL BE UNAVAILABLE AFTER NOON TODAY, FOR THE BALANCE OF THE SESSION. THERE WILL BE NO MARKET WRAP.
The overnight drop bottomed within 2 ticks of this morning’s 2264.00 bias-down target. Its recovery peaked at this morning’s 2270.75 bias-down signal. The open’s dip to 2267.00 was recovered back up to 2270.75, and then through it.
Fresh highs at 10:15 filled the gap back up to yesterday’s 2275.00 close to within 1 tick. That was the minimum reward for not selling off through the open. Additionally, holding a test of the bias-down signal has put into play an offsetting test of the 2278.75 bias-up signal.
Back under 2270.75 at 10:30 would invalidate the bias signal. No requirement then to decline, just a greater vulnerability. Otherwise, sellers could be marginalized for the day.
Marginalized doesn’t mean dormant. Sellers, or buyers, may yet launch substantial efforts today. Thursday afternoons ahead of a Friday’s Employment Situation report often become paralyzed by anxiousness. But the opposite today wouldn’t be surprising since volatility preceding yesterday’s FOMC wasn’t very restrained. Neither was volatility following it, already makes Friday interesting.
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
PROGRAMMING NOTE: I WILL BE UNAVAILABLE AFTER NOON TODAY, FOR THE BALANCE OF THE SESSION.
Through the prior close…
Rallying into Wednesday’s open and then surging was only able to briefly probe above the morning’s 2283.50 bias-up target. And it was unable to maintain the upward momentum, as the balance of the bias timing window reversed back down to its 2278.50 bias-up signal. Through it, too, although not decisively in time to actually trigger a synthetic bias-down signal. So, extending down sharply only tested the 2270.50 bias-down signal by 2 points, and wasn’t required to also test the morning’s 2265.50 bias-down target. Afternoon choppiness triggered by the FOMC policy statement attempted to break lower, but from above the morning’s low, which makes the pattern distributive and not accumulative. Bounces to 2277.00-2278.00 produced the third consecutive 2275.00 finish.
Overnight action’s new info…
The late bounce’s reversal down to 2275.00 didn’t hesitate extending through it to attack Wednesday’s lows down to 2269.50. Another quick drop tested what had been Wednesday morning’s 2265.50 bias-down target. Later probing under it by 1 point — to within 2 ticks of this morning’s 2264.00 bias-down target — reacted up into Europe’s opens. Its reaction up to 2269.50 was retraced briefly to retest 2265.50, which is recovering again.
If, then…
Three consecutive closes at the same level may seem likely stability, following Monday’s opening plunge from 2281.00 down to 2263.50. But it is actually three consecutive failures to attract strong-handed buyers. That indecision gradually makes another downleg to lower lows likelier and likelier will be required. Already probing lower last night also suggests that another downleg is beginning. There’s still a small chance of holding the retest of Monday’s 2263.50 low, a very small chance. Bank of England releases minutes from its policy meeting, which might be more of a catalyst for volatility than usual. If that volatility is down, then the next lower objective would be to test 2248.50..
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2266.75 would be likely to trigger the 2270.75 bias-down signal at 10:15. Exiting the open under 2262.75 would be likely to also break under the 2264.00 bias-down target through 10:15, and to renew the bias-down signal. Exiting the open above 2265.50 would be unlikely to renew the bias-down signal. Exiting the open above 2273.00 would be unlikely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2282.75 | 2278.75 |
| …would target | 2288.00 | 2284.25 |
| Bias-down: under | 2274.50 | 2270.75 |
| …would target | 2268.00 | 2264.00 |
| 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)
Wednesday’s close was the third consecutive to end at 2275.00. Following Monday’s opening plunge, that might seem like stability. No, it is indecision. The longer that strong-handed buyers don’t sponsor a recovery, the likelier that another downleg to lower lows will be required. Unless Thursday’s open were to maintain a gap up, a test of 2248.50 has become likelier.
FOMC is now history. Earnings announcements have tapered off. BOE announces its policy statement Thursday morning, and then headline risk can pause. That is, until Thursday afternoon, when markets may become paralyzed by anxiousness ahead of Friday’s Employment Situation report.
Actually, volatility preceding FOMC wasn’t very restrained. Neither was volatility following it. Two attempts to break lower each failed — but, from above the morning’s low, which makes the pattern distributive and not accumulative. So, Thursday afternoon volatility can’t be ruled out. Unfortunately, I will be unavailable after noon to annotate it in the chaRTroom.
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))
Tuesday’s gap up to prior highs that closed higher needed confirmation from a second consecutive higher close. Gapping down Wednesday didn’t make that likely. Tuesday’s close above prior highs at 1.0815 still represents a gap wanting to be filled, and likely to be filled, until rejecting it by closing under a prior low like 1.0750.
Gold Apr Contract (GC, ETF: (GLD))
Wednesday’s dip back under the 1206.50 sell signal by almost $7 avoided producing a new downleg, since it was recovered through the close. Closing back above Tuesday’s 1218.00 high would target 1235.00 and potentially also 1259.00.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s test of the 17.63 objective and its fulfillment of a fresh recovery high close, was not extended Wednesday. This doesn’t equate to rejecting it, and a higher close Thursday would still have room up to 18.18 or 18.72.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending the corrective bounce Monday and Tuesday to 151-05 did not change whether it was only a correction. Sliding Wednesday morning back under Monday’s low to 149-23 greeted the FOMC Minutes with downside momentum, and after having expended a lot of buying pressure without gaining any traction for the effort.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Weak reactions to production and inventory reports offered another opportunity to resume the decline, which Tuesday’s open had otherwise isolated to Monday night. The session held a test of the 53.50 buy signal.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Already having fulfilled the 3.12 objective Tuesday, closing back above 3.15-3.20 could signal the decline’s momentum has lapsed. Probing it overnight was nevertheless reversed by Wednesday’s open, and not recovered again.