S&P
The First Trade… Needs to get choppier.
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…
Gapping down Sunday night to fresh lows had met the correction’s next lower objective at 2181.00. An overnight surge attacking 2206.00 had itself corrected deep enough for Monday’s opening 10-point surge to quickly attack 2209.00. That was the end of Monday’s surges. It was the end of Monday’s rally, altogether. Retracing back down to attack the open’s lows around 2199.00 was quickly recovered up to a 2203.50 buy signal. But it was the opposite of an inflection point, testing it for 45 minutes within a narrow 5-tick range, finally blipping-up to 2206.00 after the close.
Overnight action’s new info…
Monday afternoon’s late lack of momentum undermined the momentum of bouncing off of session lows. The late blip-up to 2206.00 was not extended. Narrow ranging finally dipped at Europe’s opens, but only to attack 2200.00. That got nowhere — nowhere new — and now 2206.00 is being retested.
If, then…
The likely resolution to Sunday night’s surge remains higher. More so for not reversing Monday’s post-open extension intraday. And now all the more so for not reversing it overnight. But the sequence at this stage requires at least another higher high to maintain its uptrending characteristic. And that’s just to maintain the trending. The optimal version of a higher at this stage would resume the rally — not as another surge that expends near-term energy, but as a seemingly relentless push higher. The objective is to probe new highs above the anchor at last week’s high, presumably including the outstanding 2220.00 objective, regardless of how much or how little delay there is before then reversing back down. The overnight fluctuation isn’t choppy enough to rely on any new trending this morning. And while reversing down would still be likely to recover, that could be from sharply lower levels around 2181.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2209.00 would be likely to trigger the 2207.75 bias-up signal at 10:15. Exiting the open under 2203.50 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2209.00 | 2207.75 |
| …would target | 2214.50 | 2213.50 |
| Bias-down: under | 2199.50 | 2198.50 |
| …would target | 2194.00 | 2192.75 |
| Signal status:NO-BIAS | 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)
45 minutes of testing the 2203.50 buy signal was mostly contained within a narrow 5-tick range. That is the opposite of an inflection point. That followed gaining 4 points in the prior hour from testing the window’s 2199.75 support. The lack of momentum undermines whatever is compelling about the area’s hold-long setup.
But the likely resolution remains higher, probing new highs above the anchor at last week’s high. Possibly not for any extended length of time, or at least being vulnerable to reversing down sharply again. Not extending higher Tuesday would make Sunday night’s lows around 2181.00 a likely attraction.
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… Here comes the towel throwing.
Pullback has held support.
Extending the overnight rally had tested and retested this morning’s 2207.75 renewed bias-up target. That’s where the morning’s bias environment was entered. Its reaction down has extended to test and retest this afternoon’s 2199.75 bias-down signal. That’s where the bias environment was exited.
Resolving up is likely, but not necessarily today. Meanwhile, any delay in resolving up is vulnerable to extending the pullback. Extending the pullback would likely recover, but it could be from sharply lower levels.
Currently, a bounce is testing 2203.50, whose recover could launch a new rally leg. Regardless, a hold-long into the close may be contemplated.
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))
The potential Euro bottom I have been pointing was in jeopardy when Italy’s vote triggered a plunge back through prior lows down to 1.0510. But already recovering at the open had isolated the overnight drop. And gapping up then extended to fresh highs testing 1.0802. The wide outside day does help to suggest a bottom is forming, but it can also expend all near-term available buying pressure and need a corrective dip.
Gold Feb Contract (GC, ETF: (GLD))
Sunday night’s reaction to Italy’s referendum triggered gap up and extension to test the range’s 1190.00 highs before reversing to probe under 1166.00 again down to 1158.60. The pattern remained bullish so long as 1166.00 was recovered through the close, and in fact the gap back up to Friday’s 1177.00 close was tested Monday afternoon. Extending any higher now requires pullbacks to hold 1172.50.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up and testing 17.05 overnight on Italy’s vote was reversed down sharply to 16.55 Monday morning. But recovering into the close reached new intraday highs testing 16.95, just 10 cents under the overnight low, still suggesting a new upleg is underway.
30-year Treasury Mar Contract (US, ETF: (TLT))
An overnight surge to 151-19 on Italy’s vote was reversed to greet Monday’s open back down at 149-22. Extending to 149-11 bounced to test 150-25 — again — bordering on overkill for retesting resistance instead of already exploiting that it has held multiple tests.. Back above 151-22 could suggest the downside is already done.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s strength and Monday’s modest gap up ultimately ranged sideways at or above Thursday’s prior high, attacking the 52.75 target to within 30 cents. The trend remains up so long as 50.50 holds as support.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Friday’s pullback under 3.48 to 3.37 was recovered to fresh highs Sunday night, which extended back up to and though Thursday night’s 3.57 high to 3.65. The action is very impressive, but cannot afford to hesitate extending higher as it is testing natural resistance back to October’s high gap at 3.67.