S&P
Market Wrap (recording & summary)
Thursday’s unchanged open at 2294.00 offered no suggestion there had been an overnight rally to new highs. But the open’s inability to reverse down probably has the overnight high’s attraction to blame. Complexity while forming the “new Globex trend extreme” at 2299.50 requires its eventual retest intraday.
Probing lower into and out of the noon hour finally bottomed at 2289.50. And a bias-down signal was narrowly avoided. Reacting up to 2294.75 threatened to reverse the trend up. But the threat soon passed, as the final hour’s entry failed to exploit the opportunity to extend higher.
Stronger buyers had not been attracted. The first low wasn’t deep enough, so could a second low steep enough? In fact, the low was attacked to within 3 ticks when the position-squaring window opened. Its test held, but the close was only unchanged from the open.
Perhaps Thursday’s inhibition against resuming the rally was due to anxiousness ahead of several high-profile post-close earnings (e.g. GOOGL, INTC, MSFT, SBUX, WYNN). Well, the earnings are now history. A deeper, steeper dip remains possible, but resuming the rally remains likely, especially by gapping up Friday.
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))
Three days of fluctuating narrowly around last week’s high finally started behaving as if a Double Top had formed, gapping down and probing lower Thursday morning. The 1.0690 sell signal was tested, and a second consecutive lower close on Friday would reverse the trend down.
Gold Feb Contract (GC, ETF: (GLD))
Gapping down again Thursday probed under the 1195.00 sell signal to test 1184.00 support. A top has very likely formed, although the potential for a corrective bounce can’t yet be dismissed.
Silver Mar Contract (SI, ETF: (SLV))
Thursday’s dip tested the 16.75 sell signal that had been attacked Wednesday. Closing under it would be entirely credible for reversing the trend down, leaving no unfinished business above but an eventual higher close.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending even deeper overnight touched 148-30, piercing the year’s opening gap down that had recovered to close positive that day. There is no bullish reason for its retest, but its test did react up intraday to attack 150-00.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Bouncing Thursday attacked the range’s 54.25 upper-end, which allows the sell signal to be raised to 53.25. Closing above 54.25 could suggest a bigger bounce underway, but not reliable.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of strength. That didn’t prevent extending higher overnight to gap up above all prior relative highs, or extending higher intraday to 3.50. While closing above the 3.40 prior highs is a breakout, closing under the open’s gap up suggests that Friday won’t produce a second consecutive higher close. Higher highs would target 3.65. Otherwise, the weekend should be greeted reversing back down to 3.27 and to test 3.12.
Mid-day Update… Digging deep.
Did they strike buyers?
This morning’s opening action warned early that it could become a dry cleaners morning. And when neither bias signal had been touched by 10:15, the balance of the morning edged its way back down to the open’s 2291.75 low.
2291.75 was also the overnight low, which held through the open to suggest that sellers weren’t going to retake control. That didn’t prevent piercing slightly lower during the noon hour, and then dipping to 2289.50.
But this afternoon’s 2290.75 bias-down signal did not trigger. It also didn’t hold. It was still being tested at both 1:20 and 1:30 to trigger noN-bias. Sellers still haven’t taken control — digging deeper and deeper has been more an effort to attract strong-handed buyers.
Back above 2293.00 (being tested now) would suggest that the drop had dug deep enough. Rallying back to overnight highs would be likely. Otherwise, digging any deeper for sellers could need to dig steeper, too.
Look ahead: Economic Calendar – for Fri Jan 27, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Durable Goods report has a track record for influencing price action. And its pre-open reaction is likely to be duplicated when the post-open Consumer Sentiment is released.
*Durable Goods Orders
8:30 AM ET
GDP
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2301.75 | 2297.25 |
| …would target | 2306.75 | 2302.50 |
| Bias-down: under | 2295.00 | 2290.75 |
| …would target | 2288.50 | 2284.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.