S&P
The First Trade… *Pop* goes the weekend.
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…
A third consecutive narrowly ranging overnight Globex session was followed by a third consecutive intraday rally that ended above the morning’s highs. The morning held a test of the next higher upside objective at 2247.25 and the afternoon held tests of its higher objective at 2252.50. Intraday patterns targeting 2254.25 defined the cash session highs No traction was gained, but a new trend extreme close on Fridays requires at least one eventual new trend high close.
Overnight action’s new info…
Agreement among non-OPEC producers to limit production triggered a 10-point surge at Sunday night’s open, attacking 2265.00 just 15 minutes later. It was steadily retraced during the next 5 hours, despite its catalyst Crude Oil maintaining its gap up. Except for that round-trip, the balance of price action has resembled the three prior consecutive overnight Globex sessions — choppily fluctuating around unchanged, most recently touching 2151.75. Currently a bounce has recovered again to unchanged at 2254.25.
If, then…
This weekend’s Saturday Review discussed reasons why a multi-session pullback would not be inappropriate to begin today, regardless of whether fresh highs were probed first. I can update that now to say that it remains as true, despite last night’s probe higher. But now that fresh highs have been probed, reversing down intraday would be likelier if they’re isolated to the overnight. Despite its substantial 10-point girth, last night’s opening surge had no complexity that would otherwise have required its intraday retest. It’s interesting that Sunday night’s open didn’t gap up before surging, almost grudgingly moving to discount Crude Oil’s reaction to this weekend’s news, which had gapped up. Similarly, the open’s surge was retraced while Crude Oil continues to hover at its gap up levels. If a multi-session pullback were going to begin today anyway, then compensating for the artificial overnight surge may exacerbate its depth.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2251.50 would be likely to trigger the 2253.25 bias-down signal at 10:15. Exiting the open above 2256.00 would be unlikely to trigger bias-down.
Globex open just popped 10 points.
Friday’s rally into the final hour had fulfilled its highest calculable objective at 2254.25. Reacting down touched 2151.75, and any deeper would have reversed momentum down, albeit too late to damage the chart. Anyway, its touch bounced back up to 2254.25 and firmed another point into the futures close.
Now Sunday night’s open has surged 10 points to attack 2265.00. The catalyst is an oil output deal that has pushed Crude Oil $1.25 above its 52.75 target, with potential up to 56.15. This weekend’s Saturday Review noted that the next higher objective has room up to 2270.00, but also that a higher close is not assured, while a multi-session pullback is getting likelier.
MONITOR GLOBEX IN THE CHARTROOM HERE
watch the Saturday Review recording here
Post-market Wrap (recording & summary)
A new trend extreme close on Friday, and you know what that means… 1. At least one higher close is expected, eventually if not already on Monday. 2. So, not closing higher Monday would tell us the reaction down is only a temporary correction.
Closing higher Monday would render this contextual information useless. But immediately beginning a pullback — which could last several days — would give us confidence in expecting it to be temporary, and in looking for its complete recovery.
There are other interesting factors to last week’s rally. We’ll discuss them during this weekend’s Saturday Review. I’ll send out a reminder overnight. Meanwhile…
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2267.00 | 2261.25 |
| …would target | 2272.25 | 2266.50 |
| Bias-down: under | 2259.00 | 2253.25 |
| …would target | 2252.50 | 2246.75 |
| Signal status: INVALIDATED NO-BIAS, BIAS-DOWN SIGNAL TESTED | 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.
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))
Thursday’s break under 1.0685 extended down deeper Friday to test month-old prior lows at 1.0535. Already having probed under it Sunday previously suggests that the likely retest will not form a quick bottom and recovery..
Gold Feb Contract (GC, ETF: (GLD))
Friday’s dip back under the 1178.50 pullback limit extended much deeper, retesting not only the decline’s 1166.00 target but also attacking prior lows under 1160.00. This action contradicts the bottoming effort, which still must be aggressive in launching a rally leg.
Silver Mar Contract (SI, ETF: (SLV))
Room for noise down to 17.00 was probed Friday down to 17.90, almost as deep as possible without yet reversing the trend down.
30-year Treasury Mar Contract (US, ETF: (TLT))
Thursday’s overdue break was confirmed Friday by gapping down and trending lower, producing a second consecutive lower close that attacked prior lows. An eventual third lower close is now required, targeting 147-21.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Friday was an appropriate start to an upleg targeting fresh highs at 52.75, which would be confirmed by a second consecutive higher close Monday, and could extend higher anyway so long as pullbacks hold 50.50.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Fresh highs tested 3.75 Friday which would trigger an extended upleg if recovered through the close. Otherwise, closing back under 3.57 would reverse the trend down for at least a correctiion.