S&P
The First Trade… Sellers nearly marginalized.
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…
Monday’s overnight rally to 2261.00 had been largely retraced before the open, and then fully retraced to Friday’s 2254.00 cash session close right after the open. That’s a lot of selling pressure to expend without yet even turning negative. In fact, it was all available selling pressure. Bullish WedEX’s influence exploited the vacuum and launched a surge back to the overnight high. Then another surge probed higher to attack 2264.00. A pullback into noon was largely recovered throughout the afternoon bias environment. The recovery seemed poised and even intent to resume the morning’s rally, when headlines triggered a complete retracement back to the morning’s low.
Overnight action’s new info…
Already bouncing through 2259.00-2260.00 through the cash session and futures close, Globex immediately firmed further to 2262.00. A narrow 2-point range broke higher at Europe’s opens, soon blipping-up to attack 2265.00. Its reaction down to 2262.00 has recovered to now probe higher up to 2265.50.
If, then…
The rally’s excuse for delay Friday afternoon was the president’s press conference stealing focus. Its excuse Monday afternoon was headlines of terrorist actions around the globe. The validity of either of these conditions is irrelevant, so long as this is true — Much has been thrown at this market since last Tuesday’s 2273.00 high, and yet it is repeatedly attacked to 5-9 points. This price proximity alone is enough to be confident in the high’s retest. That’s only helped by Tuesday’s proximity to the weekend holiday’s seasonal bullishness. Not already rallying at Tuesday’s open would have been vulnerable to at least attempting a deep corrective dip. But the open is indicated to at least test yesterday’s highs, if not also surge higher. A post-open reaction down may be the only path lower before next week.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2264.00 would be likely to trigger the 2262.00 bias-up signal at 10:15. Exiting the open under 2259.00 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2265.00 | 2262.00 |
| …would target | 2270.00 | 2267.25 |
| Bias-down: under | 2257.25 | 2253.25 |
| …would target | 2248.75 | 2247.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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.
Post-market Wrap (recording & summary)
Were terrorist actions around the globe responsible for derailing Monday afternoon’s attempt at rallying to fresh highs? Possibly in the same degree that Friday afternoon’s presidential conference inhibited the bullish WedEX. Of course, Monday’s distraction was more serious, and the price reaction trended down instead of ranging sideways. But already rallying at Tuesday’s open would put into play new highs. Not already rallying at Tuesday’s open would be more vulnerable to launching a deep corrective dip before seasonal bullishness takes over into the weekend.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Another distraction.
This afternoon’s distraction is world events.
Not to minimalize the tragedy of it all, but several terrorist actions around the globe are having a similar effect this afternoon as did the president’s press conference Friday.
This afternoon’s 2261.00 bias-up signal didn’t trigger, but it was practically busting at the seams during the bias environment. It was probed up to 2262.50, and then retested as the bias environment began lapsing. No longer being required to define the range’s upper-end could have repeated the open’s surge, but that was overtaken by headlines.
Several terrorist actions around the globe have injected an unknown that wasn’t part of the market’s earlier calculus. That’s not so much bearish as it is inhibitive to rallying.But not rallying IS potentially bearish, since there is “unfinished business below” at this morning’s 2251.25 bias-down signal.
Not trending back up through 3:10-3:20 makes rallying unlikely before the close. Not probing any deeper would allow the 3:37 position-squaring window another chance to rally. Meanwhile, flat-to-lower is likely.
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))
Last week’s test of the 4.0410 lowest calculable objective doesn’t require a retest, despite Friday’s high having held a test of the decline’s initial 1.0525 target as resistance. But bottoming requires that 1.0435 not break as support, at least through any close, at least for no more than one session.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s spike up through the 1135.50 buy signal was in reaction to destabilizing news instead of organic, so its 1146.00-1149.00 target wasn’t any likelier to be met. But 1135.50 held as a pullback limit through Monday’s open so the target area’s test is likely anyway.
Silver Mar Contract (SI, ETF: (SLV))
Monday’s inside day gapped down slightly and trended down slightly, which suggests that weak hands are pessimistic. That is potentially bullish from a contrarian perspective, but does not preclude one more probe of fresh lows with potential to 15.66.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday repeated the pattern of bouncing optimistically by gapping up, instead of fulfilling the requirement for at least one more new low close. The cumulative delay suggests that more than one new low close will develop to compensate for the delay.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight strength up to 52.50 was retraced to greet Monday in negative territory, and not retested despite returning to positive territory intraday. A second consecutive close Monday would confirm Friday’s breakout, requiring at least an eventual third higher close.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Dipping overnight to a fresh low at 3.33 was recovered before Monday’s open, but momentum did not reverse up, making fresh lows likely with potential down to 3.19.