S&P
Mid-day Update… New heights of complacency.
Hovering at fresh relative highs.
The overnight rally began with Europe’s opens triggering a break above 2262.00. It ended with the open’s surge up to 2269.50. That was the open. the balance of the morning worked its way back down to 2263.50.
Firming through the noon hour is retesting what had been this morning’s 2267.25 bias-up signal. Its resistance was obviously influential then, and it/s clearly influential now. Its test is also not reversing down.
RSIs are stuck and not reflecting any sponsorship. This hesitation isn’t so close to the 2273.00 high to be labeled “pessimism,” but it is bordering on being “complacency.” Still not rallying out of the bias environment would try attracting strong buyers below at 2260.50-2262.00.
Look ahead: Economic Calendar – for Wed Dec 21, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s first two econ reports speak to the housing sector, which gave mixed signals last week — optimism is up among builders, while interest rates are up for buyers. The mid-morning EIA report greets a Crude Oil market starting to recover from a pullback, with a retest of the prior Sunday night’s gap up outstanding.
MBA Mortgage Applications
7:00 AM ET
Existing Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2272.00 | 2268.50 |
| …would target | 2277.00 | 2273.50 |
| Bias-down: under | 2266.50 | 2263.00 |
| …would target | 2259.75 | 2256.25 |
| Signal status: NO-BIAS | 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.
Post-open Review… Path of least remaining resistance.
Gap up extends.
Reacting down pre-open from testing the 2267,25 bias-up target greeted the open with a blip-down to 2264.00. Its reaction was quick, and quickly extended up to 2269.50. That’s the highest level since last Wednesday afternoon’s initially favorable knee-jerk reaction to the FOMC statement.
It didn’t last this morning, either.
The reaction down to 2265.75 only overlapped the 2267.25 bias-up target at 10:!5, instead of exceeding it to renew the bias-up signal. It’s still a bias-up environment, with room back down to the 2262.00 bias-up signal just as noise. Back under 2265.00 (being tested now) would suggest a dip to 2262.00 is underway.
Having dipped to 2265.00, back above 2267.25 would start to signal the rally is extending. It’s too late to renew the bias-up signal, but extending higher anyway would target a retest of last Tuesday’s 2273.00 high. And the longer that takes, the less time available for a reversal to begin by Wednesday afternoon, when strong hands will already be positioned for the weekend holiday.
Pre-market Tour (recording & summary)
The overnight rally has extended up to this morning’s 2267.25 bias-up target. RSIs diverged negatively there, and price has reacted down to 2265.00. That’s still above the 2262.00 bias-up signal that had held repeated tests as resistance until Europe’s opens. So, trending this morning instead of ranging may depend on either renewing the bias-up signal above its target, or rejecting bias-up back under its signal.
Details and other markets coverage are discussed in the pre-market Tour recording here.