S&P
The First Trade… And then there was one (again).
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…
Tuesday’s intraday rally came expectedly, but not as expected. Despite being indicated to gap up as high as 1 tick above Monday’s high 2208.75 high, the 2206.25 opening print was back under Monday morning’s highs. That pre-open slump quickly extended down to attack Monday’s lows to within 2 points at 2100.00. But then the balance of the session did rally, not surging, relentlessly through multiple timing windows, to new highs at 2212.00. Last week’s pullback was confirmed to be only temporary, and the 2110.25 anchor from last Wednesday’s open — which had all but required being tested — is neutralized. Traction was gained during the afternoon.
Overnight action’s new info…
Flat-to-higher ranging has been relatively narrow. At one point dipping to 2208.50, and eventually recovering to probe Tuesday’s highs, a new high print at 2213.00 seems almost accidental. That happens to be this morning’s bias-up signal calculation, derived from yesterday’s intraday patterns. In any case, the fresh high hasn’t attracted new sponsorship. Its quick reaction back down into the range has been holding 2210.00 as support.
If, then…
This isn’t the first time that only one piece of “unfinished business above” was outstanding. It was the same piece, the next higher objective at 2222.00 which was put into play by closing above 2192.00 two weeks ago. That’s how last Wednesday’s session was greeted, and it resolved poorly. Gapping up formed an anchor that yesterday finally retested, one week and a 64-point round trip later. Traction gained by yesterday afternoon’s rally suggests the morning will trend up, too, regardless of gapping up or down. The setup can be inverted by gapping down under yesterday’s 2204.50 noon hour low, but I would still be suspicious if the 2206.00 afternoon bias environment low were broken. Otherwise, 2220.00 is in-play until proved differently.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2215.50 would be likely to trigger the 2213.00 bias-up signal at 10:15. Exiting the open under 2209.00 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2214.25 | 2213.00 |
| …would target | 2221.00 | 2219.75 |
| Bias-down: under | 2206.25 | 2205.50 |
| …would target | 2201.00 | 2199.75 |
| Signal status: noN-BIAS, STILL-TESTING 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)
The anchor from last Wednesday’s open is a structural point, singularly defined as 2110.25. It had all but required being tested, the minimum objective of last week’s pullback. Last week’s pullback was likely to be only temporary because of the “unfinished business above.”
That unfinished business didn’t take long for its retest after fulfilling the pullback’s next lower objective at 2181.00. The final hour’s entry touched it, and then fresh highs probed it up to 2212.00.
Now that the attraction is tested, there is no requirement to extend higher in the near- term. Closing above 2192.00 two weeks ago did put into play the next higher objective at 2222.00. That’s still likely, but it’s not required on this leg.
Traction gained during the afternoon suggests the morning will trend up, whether from opening flat or from gapping. Gapping down would still be likely to trend up. That qualifies less as a hold-long since gapping down remains possible.
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… Traction.
Well-timed fresh highs.
The lower-end of the range’s return to the range’s upper-end has extended back up to prior highs. That includes the “anchor” which had formed at last Wednesday’s open. It was all but required to be retested, at least back to its 2210.25 open.
While the attraction above is being neutralized, upside momentum is being confirmed. The bias environment began lapsing above the noon hour’s high, and the final hour was entered higher. Except for one of two exceptions forming, tomorrow morning is likely to trend higher.
Currently, a 2-point reaction down is testing the noon hour’s highs as support. Almost any lower would likely also visit 2206.50, if not also 2204.25. All of which would maintain this afternoon’s traction to allow trending up in the morning, instead of inverting for a much deeper pullback.
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))
Although Monday’s rally is only likely to probe higher and not necessarily required, gapping down Tuesday is not the rally’s appropriate end. Higher highs remains likely so long as the 1.0680 pullback limit holds.
Gold Feb Contract (GC, ETF: (GLD))
Tuesday’s shallow intraday weakness nonetheless finished under the 1172.50 pullback limit. A recovery has no excuse to further delay extending higher, let alone closing back above 1180.00 to launch a substantial upleg.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday was essentially an inside day, hovering at Monday’s highs and above 16.70 which must hold to maintain the bullish pattern.
30-year Treasury Mar Contract (US, ETF: (TLT))
Dipping slowly Tuesday didn’t resume the decline, so much as undermine it, all but requiring a more obvious dip back to and through the lows — which remains likely so long as 151-22 isn’t recovered.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down to test the 50.50 pullback limit Tuesday never recovered nor resumed the rally, but the pullback limit held. Now in addition to the next higher objective outstanding at 52.75, the gap back up to Monday’s 51.55 close is likely to be filled.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Probing fresh highs Tuesday up to to 3.73 was not maintained as price dipped back into Monday’s range. This a dangerous area for the rally to lose momentum, as it fills an outstanding gap back up to October’s prior highs. The next reaction down should be sudden, steep and substantial, likely to test 3.60, which must be rejected almost immediately to maintain the rally’s momentum.