S&P
Pre-close View… Threading a needle.
REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.
The afternoon’s 2060.50 bias-up signal was overlapped in time to invoke the grace period. It held long enough to avoid triggering. Price during the no-bias environment didn’t drift back down toward its bias-down signal. It hovered.
And 2060.50 started breaking higher when the bias environment lapsing came within view. Actually, a couple of minutes earlier — not very premature, but not optimal. Extending higher to 2262.25 has reacted down to 2259.00.
The final hour was not entered any higher than 2260.50. The afternoon rally is still undermined. The alternative is not necessarily to decline, but the window is open.
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))
Thursday’s open gapped up to the 1.0505-1.0520 bounce limit and extended through Friday’s 1.0615 prior high. Closing higher would target 1.0755, and potentially higher, regardless of the recent low’s range requiring a retest as support.
Gold Feb Contract (GC, ETF: (GLD))
Not already reacting down Thursday from Wednesday’s test of 1167.00 was instead likelier to extend the rally. Gapping up to 1174.00 extended higher through the morning to fulfill the next higher objective at 1184.20. Closing back under 1180.50 would signal momentum reversing down.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday’s sub-optimal confirmation of Tuesday’s breakout didn’t prevent extending higher Thursday to test 16.75. Not already extending higher at Friday’s open would be vulnerable to correcting back down under 16.20.
30-year Treasury Mar Contract (US, ETF: (TLT))
Reacting down sharply from an overnight test of the 151-12 target didn’t prevent another test intraday, or extending that test sharply higher to 152-22. Its 152-02 pullback limit must break to suggest the surge wouldn’t be confirmed, and back under 151-24 would signal momentum reversing down. Otherwise, the rally could extend to test 152-26.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up and extending higher through 53.45 “higher prior lows” and filling the gap back up to Friday’s 53.70 close was nevertheless reversed back down from 54.10 to 52.80 by Thursday morning’s EIA release. That didn’t reverse momentum down, as 53.70 was recovered. But 54.25 wasn’t recovered, which would have targeted filling the gap back to Tuesday’s 54.80 gap up.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA release wasn’t greeted from a position of strength, which would have doomed an initially favorable knee-jerk reaction up. Regardless of its path, the resolution was down, fulfilling the 3.19 target which held while RSIs diverged positively, A bottom is free to form.
Mid-day Update… Slippery oil.
Afternoon rally undermined by Crude Oil drop.
The gap back up to yesterday’s 2264.50 close was only filled this morning, never probed. That wasn’t the differential to rallying later — sellers had already failed to retake control when that was required. But the likelihood for an afternoon rally would have been greater without sellers even trying to retake control again. Which they did.
Reaction to this morning’s EIA release sent Crude Oil down. The market fell with it from 2263.00 to 2256.50. Probing lower down to 2254.00 was retraced entirely through the noon hour back up to 2256.50.
The 2260.50 bias-up signal didn’t trigger, despite invoking the grace period. Hovering at it until the bias environment lapses would be vulnerable to then breaking higher, and essentially fulfilling the bias-up target.
Exiting the bias environment back under 2256.50 and lower would confirm what exiting the bias environment under the morning’s bias-down signal had suggested — undermining the afternoon rally scenario and all but reversing momentum down.
Look ahead: Economic Calendar – for Fri Jan 6, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Employment Situation report isn’t often accompanied by other econ reports. But its reaction will set the tone for the post-open Factory Orders. Two Fed speakers before and after noon — the first Fed speakers since before the holidays — will help to keep alive volatility despite the fast-approaching weekend.
*Employment Situation
8:30 AM ET
International Trade
8:30 AM ET
Factory Orders
10:00 AM ET
*Charles Evans
11:15 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*Jeffrey Lacker Speaks
1:00 PM ET
*Charles Evans
3:10 PM ET
*Robert Kaplan
3:130 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2266.75 | 2260.50 |
| …would target | 2272.25 | 2266.00 |
| Bias-down: under | 2259.75 | 2253.50 |
| …would target | 2253.00 | 2248.75 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP 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.