S&P
Post-open Review… More distribution.
Overnight slide extends, to a point.
Fresh lows were tested pre-open down to 2267.25. The slide’s slope immediately steepened on the way down to 2263.50. Its reaction back up to 2267.25 held, and defined fluctuation around the 2265.50 bias-down signal.
2265.50 was touched within 3 minutes of 10:15 to invoke the grace period. It happened to be recovered through 10:30 to trigger late no-bias. An offsetting test of the 2275.50 bias-up signal is in-play.
The bullish scenario is that these two most recent thrusts downward reflect distribution. No argument from me. But they’re still digging deeply enough early enough for long enough to reflect strong hands reversing the trend down.
Back under 2264.25 would suggest otherwise. The late signal hasn’t yet produced a fresh post-open high, so its objective would be moot. And a multi-session downleg would likely be underway.
Pre-market Tour (recording & summary)
The overnight dip to 2267.75 reacted up to 2270.50. But only temporarily. Retracing it entirely back to the bounce’s origin is now poised to probe lower. The bias-down signal is only about 2 points lower, and holding its test by 10:15 to trigger no-bias could be bullish, putting into play an offsetting test of the bias-up signal. While that wouldn’t be assured of extending, let alone of being fulfilled, triggering bias-down would more likely extend into a deeper pullback.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Detour beginning?
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
While all eyes have been on Dow 20k, which was attacked Friday to within 1 point, S&Ps fulfilled our long-awaited retest of the 2273.00 prior high. Its 2275.50 objective was probed up to 2277.00 during the noon hour. The balance of the afternoon fluctuated choppily around 2275.50, back down to 2273.00, and then another couple of points lower into the close. Closing above 2275.50 would have put into play the next higher objective, but there’s still room for noise up to 2278.25. Meanwhile, also holding the 2273.00 prior high robs the rally of some momentum. But Friday’s close was the trend’s highest, yet.
Overnight action’s new info…
Sunday night’s open began with an errant tick touching 2270.50, and then reversed up steadily into Europe’s opens. Attacking 2275.50 resistance to within 1 tick was vulnerable, and that vulnerability has resulted in a 7-1/2 point slide to 2267.75.
If, then…
New trend high closes on Fridays require at least an eventual higher close before a durable decline would be credible. Which doesn’t prevent a near-term correction from beginning And if a correction is beginning, it may last only several day, or else it could last several weeks. Its first day can help to forecast which. Gapping down doesn’t prevent recovering intraday — in fact, the 2268.50 target of Friday’s late sell signal triggered under 2273.75 was met and held (so far) overnight. Recovering today can’t yet be dismissed, let alone already producing that next higher close. Regardless, fresh highs could be probed today without being maintained through the close. Otherwise, triggering a bias-down today would be likely if a correction is already underway.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2273.00 would be unlikely to trigger this morning’s 2275.50 bias-up signal at 10:15. Exiting the open above 2268.50 would be unlikely to trigger this morning’s 2265.50 bias-down signal.
Globex is open.
It’s Sunday night, and the market is open. Globex has firmed back up to 2273.00, that prior high which Friday’s rally finally retested. I’ll be monitoring much of the night in case anything deserves commenting. And in case you haven’t yet watched (or attended), here’s the Saturday Review recording.
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))
Friday’s initial blip-up was reversed down through the day. A pullback still has room down to 1.0505-1.0525 and then lower to the 1.0450 area where a more substantial rally leg can be launched, or else a new downleg can begin.
Gold Feb Contract (GC, ETF: (GLD))
Immediately breaking under the 1180.50 sell signal Friday was initially retraced from testing 1172.00, which was retested into the close with potential for extending down to the 1160.00 area.
Silver Mar Contract (SI, ETF: (SLV))
Friday’s decline to 16.40 leaves no “unfinished business above” while still having room below at 16.15, simply as a correction.
30-year Treasury Mar Contract (US, ETF: (TLT))
Overnight tests of the 152-30 objective were followed by a knee-jerk reaction up to 153-09 on Friday morning’s Employment Situation report. Its reaction down extended through the day to within 4 ticks of its 151-15 objective.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s choppiness ultimately finished slightly higher, maintaining potential for filling the gap at Tuesday’s 54.80 gap up before a more durable downleg can begin.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s test of the 3.18 target held for a second consecutive session. Any early strength above 3.40 would be likely to extend in that direction intraday.