S&P
The First Trade… Complacently waiting.
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…
Friday’s quadruple witch expiration open gapped up to only attack the 2264.00 overnight high, which was also the morning’s bias-up signal. Price almost immediately began trending down, extending to test 2250.00 as support coming out of the noon hour. The decline stopped there, as the bullish WedEX would begin influencing price at the bias environment’s entry. Although no new low printed, bounces up to 2255.00 never actually reversed the trend up as a president’s press conference grabbed attention.
Overnight action’s new info…
Opening flat with Friday’s 2255.00 close lasted only several seconds before surging to 2259.50. The surge lasted only several seconds before it stopped, suddenly. And durably. Choppy sideways ranging since the open’s surge has been relatively narrow, contained between 2257.00-2261.00. The lower-end is now being retested.
If, then…
The open’s surge suggests that Friday’s ranging at session lows was actually pent-up buying pressure. That would comport with the assumption that bullish WedEX was inhibited by coinciding with the president’s press conference. That doesn’t assure gapping up, or avoid gapping down, And only the opening action can offer any further assurance of the bullish WedEX influencing this morning’s action. If it does, then price should trend up, possibly aggressively. Not already rallying obviously past the open could suggest no bullish influence, and open the door to resolving “unfinished business below” at 2243.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2261.50 would be likely to trigger the 2260.50 bias-up signal at 10:15. Exiting the open under 2257.50 would be unlikely to trigger bias-up.
Link to monitor the Globex open…
The world wasn’t exactly quiet this weekend, but neither was it generally raucous and uncontrolled. There’s a new high-profile bearish opinion circulating, and nothing bullish at the moment to offset it directly. So, a mixed open seems likely, almost rudderless — which also means vulnerable to any overnight developments. We’ll soon see, or at least start seeing, as the overnight Globex session opens at 6:00pm ET.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2265.25 | 2260.25 |
| …would target | 2272.00 | 2267.25 |
| Bias-down: under | 2256.00 | 2251.25 |
| …would target | 2251.00 | 2246.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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)
Only one piece of “unfinished business below” is outstanding at Wednesday’s 1243.00 low. Thursday’s oversold RSIs at 1255.00 is retested. In fact, that’s where Friday closed. And there has yet to be any consequence to Thursday’s failed rally originating after buyers had failed to gain traction Wednesday afternoon.
The bullish WedEX was influential in two ways Friday, if it was influential at all. Neither way was overt. Its first influence is inferred from the morning-long relentless decline ending suddenly almost exactly when the afternoon bias environment began. Secondly, the close ended by bouncing to a fresh afternoon high. This suggests a specific behavior on Monday morning.
Friday afternoon’s bullish WedEX influence might have been more obvious if not for the president’s simultaneous press conference. Previous similar coincidences have also inhibited trending. But that doesn’t change the setup’s likely behavior Monday morning.
We’ll discuss these inputs and likely resolutions for setups Sunday night and Monday morning, at this weekend’s Saturday Review. Look for a reminder and login link overnight.
Meanwhile, the post-market Wrap recording is 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 Dec Contract (EC, ETF: (FXE, UUP))
Bouncing off of Thursday’s test of 1.0365 to close above 1.0390 had indicated the decline wasn’t likely to extend Friday, which retraced it up to 1.0475. A bigger bounce isn’t required, but still possible without yet reversing the trend back up, Similarly, retesting the low wouldn’t prevent a bottom to begin forming.
Gold Feb Contract (GC, ETF: (GLD))
Gapping up slightly and trying to probe higher Friday was likely to avoid a second consecutive lower close. Spiking up in reaction to an international incident with China assured it. Resistance at 1142.00 was probed by at least $1. Back under 1136.50 would likely resume the downleg next targeting 1118.00.
Silver Mar Contract (SI, ETF: (SLV))
Firming Friday to probe above Thursday’s highs prevented a second consecutive lower close which allows a bottoming pattern to begin forming sooner, rather than later. Nevertheless, that means a couple of false breaks higher and a temporary probe of fresh lows before launching anything durable.
30-year Treasury Mar Contract (US, ETF: (TLT))
Delaying the pattern’s outstanding requirement for at least one eventual lower close suggests that just one new low close won’t suffice. Delays like filling the gap Thursday back up to Wednesday’s 149-25 close, and like bouncing Friday from attacking the 147-04 low down to 147-13 before bouncing 1 point.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
.Firming further Friday morning tested the 51.75 buy signal that makes last Sunday night’s 54.50 high likely to be retested. Resuming the rally to its 56.15 target is now less likely.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Although Thursday’s fresh low close had fulfilled the minimum objective, lower lows overnight and into Friday’s open tested November’s “lower prior highs” at 3.34,. Extending down Monday would next target 3.19.