S&P
The First Trade… Old reliable is getting old.
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…
Wednesday’s close above the 2215.00 objective (basis Mar, 2220.00 basis Dec) was not rejected Thursday. The afternoon bias environment’s 2246.00 high stopped short of the next higher objective at 2147.25. Its reaction down originated too late to seriously threaten closing under the morning’s 2231.50 low, and anyway held a test of 2237.00. The close bounced 6 points up to 2243.00.
Overnight action’s new info…
A third consecutive relatively narrow overnight range? Firming only a couple of ticks up to 2243.50 was eventually retraced down to 2239.75 ahead of Europe’s opens. Congestion there has now bounced back up to 2243.50, essentially unchanged from yesterday’s close.
If, then…
Exiting any timing window above 2147.25 would target 2257.50, and either could be satisfied intraday. There is otherwise no “unfinished business above,” certainly not any requirement for a higher close. That’s especially interesting today, since rallies can entrench themselves by closing at new trend extremes on Fridays. So, while a new high close today would be bullish, not exploiting the proximity would be bearish — especially if either 2147.25 or 2257.50 were tested intraday before closing negative. That’s generally the only bearish scenario, other than temporary dips. Gapping down would not qualify for launching more than a temporary pullback, perhaps even limited to the open before recovering to retest yesterday’s highs..
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2244.25 would be likely to trigger the 2242.50 bias-up signal at 10:15. Exiting the open under 2238.25 would be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2248.25 | 2242.50 |
| …would target | 2253.00 | 2247.25 |
| Bias-down: under | 2240.75 | 2235.00 |
| …would target | 2236.00 | 2230.25 |
| Signal status: BIAS-UP, 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)
Wednesday’s close above the 2215.00 objective (basis Mar, 2220.00 basis Dec) was not rejected Thursday. The next higher objective in-play still has a little room above at 2147.25. Any higher would likely target 2257.50.
None of which must be maintained through the close. There is otherwise no other “unfinished business above.” If the rally is going to entrench itself, then closing at a new trend extreme on Fridays is its next opportunity.
Meanwhile, features to this rally’s origin still make it vulnerable to reversing down sharply, especially when the end comes. The ultimate reversal’s origin matters, too, and gapping down sharply would not qualify for launching more than a temporary pullback.
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… Programming note.
PROGRAMMING NOTE: The post-market Wrap will be held a half-hour early today at 3:33. I’ll be available through the close.
This afternoon’s 2246.50 bias-up target was met to within 2 ticks. Just attacking it to within 3 ticks prevents it from becoming “unfinished business above” if left outstanding.
And it sure looks like it will be left outstanding. Reacting down into and out of the bias environment lapsing has extended to test 2237.00.
It’s possible that all trending today is done, leaving the balance of the session to range sideways. Back under 2237.50 would suggest fresh session lows are in-play. But there is otherwise no bullish setup.
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))
Blipping up sharply in reaction to Thursday’s ECB news was reversed back down more sharply Thursday morning, testing the 1.0650 pullback limit. Holding its test prior to probing fresh highs would have been bullish. Not holding its test after probing fresh highs is bearish. And it was broken down to 1.0600, where Sunday night’s drop to fresh lows was triggered. There is no active signal.
Gold Feb Contract (GC, ETF: (GLD))
Thursday’s shallow dip was similar to Wednesday’s brief probe above 1180.00, both reflecting restrained optimism, which can be bullish from a contrarian perspective — and which should behave very optimistically upon actually breaking above 1180.00. But the shallow dip must continue holding its test of the 1172.50 pullback limit.
Silver Mar Contract (SI, ETF: (SLV))
Gapping down Thursday held a test of the 17.00-17.10 pullback limit to maintain the upside momentum. But a second consecutive higher confirming close was not produced, so the rally effort cannot tolerate a second consecutive dip.
30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday’s narrow ranging around 151-05 had kept alive potential for resuming the decline, if done immediately, since Wednesday had needed already to resume the decline. Thursday’s gap down did not compensate for the delay because it did not extend lower intraday. Regardless, a second consecutive lower close Friday is needed to confirm.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still consolidating under the 50.50 pullback limit Thursday without extending down has kept alive the potential for rally back up to the 52.75 target. The optimal start would be sudden, steep and substantial.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Thursday’s muted reaction to the EIA report didn’t reflect the weakness that greeted it. Perhaps that is because a probe of lower lows overnight was recovered and isolated at the open. Still the intraday reaction was also shallow. There is no active signal.