S&P
The First Trade… Bad news bounce.
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 session tracked its likely scenario by rallying in the morning and then dropping into the afternoon. The morning’s 2197.00 bias-up signal neatly defined the window’s upper-end, 
and dipping back under 2192.00 signaled momentum reversing down. But 2187.50 held a couple of tests during the afternoon bias environment while RSIs diverged positively, instead of extending down to the 2181.00 target. The balance of the session retraced to the 2192.00 sell signal. But only retraced it.
Overnight action’s new info…
Sunday’s open was greeted by an important referendum in Italy having lost, presumably placing Italy’s banks in jeopardy. The open gapped down to test and retest 2181.00 down to 2179.00. Its reaction probed Friday’s lows up to 2189.00 and then corrected down to 2182.00. Europe’s opens were greeted by a steep surge already testing 2196.00, and extended to attack 2206.00. Now a dip is testing and retesting 2299.00.
If, then…
I posed this question about Sunday night’s gap down when opening the chaRTroom last night: “Is that the end of what was likely to be only a brief pullback before probing fresh highs?” Up 27 points off the overnight low, still I only suspect the answer is yes. One concern about this recovery is the timing of its origin — already surging into Europe’s opens prevented a sympathetic knee-jerk reaction to mirror the Globex open. It suggests the recovery is premature and sponsored by weak hands. Regardless, the overnight low need not be revisited, but last Wednesday’s 2210.25 open all but requires a retest, and the rally has an even higher unmet objective above at 2220.00. None of which prevents post-open backing-and-filling if the overnight short-squeeze isn’t quickly resumed.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2203.50 would be likely to recover the 2200.75 bias-up target through 10:15 to renew the bias-up signal, next targeting 2207.75. Exiting the open above 2197.50 would be likely at least to trigger bias-up.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2195.75 | 2195.00 |
| …would target | 2201.50 | 2200.75 |
| Bias-down: under | 2188.25 | 2187.50 |
| …would target | 2182.00 | 2181.25 |
| Signal status: BIAS-UP, EXCEEDED 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.
Daily Spot…
A daily summary of high-profile members of several complexes… PLEASE NOTE: THERE IS NO MARKET WRAP TODAY.
Eurodollar Dec Contract (EC, ETF: (FXE, UUP))
Thursday’s test of the 1.0655 buy signal was probed overnight up to 1.0695, and then again Friday morning to at least test the 1.0685 prior highs. Closing any higher would help to confirm that Wednesday’s retest of the prior Wednesday’s close had sufficed to form a durable bottom.
Gold Feb Contract (GC, ETF: (GLD))
Modest overnight strength stopped short of even attacking the 1181.00 level whose recovery would start to suggest a bottom is forming. Friday’s post-open dip to 1168.50 was recovered to a higher high. Meanwhile, this leg’s minimum 1166.00 objective has held two tests and closed higher, with no overnight lower low, so a bottom has no bullish reason to further delay starting to signal it is forming.
Silver Mar Contract (SI, ETF: (SLV))
Rallying overnight to probe back above 16.70 was retraced already by Friday’s open. But the morning’s higher highs suggested its recovery through the close, which would begin sealing a bottom, if not also reverse momentum up.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping up Friday ahead of the Employment Situation report didn’t much change in reaction to the report. So long as 150-25 isn’t recovered, at least one more lower close remains likely.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 50.50 pullback limit was tested overnight. So long as it holds as support through the close, the next higher target at 52.75 is in-play, and potentially aslo 56.15.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Extending to fresh highs overnight does not prevent reversing down intraday. Indeed, Friday’s opening action did reverse down from testing 3.57 overnight to probe under the 3.48 pullback limit, whose break through the close would trigger a deep pullback. Closing above 3.53 would indicate the pullback limit held its test.
Mid-day Update… Morning rally ended.
UPDATE: I’m unavailable during today’s last timing window (which begins at 2:30 ET). There is no post-market Wrap or Saturday Review. It seems my connectivity has already become limited, and only the Daily Spot will be updated.
The 2191.75 sell signal held its test this morning. Probing it down to 2190.50 bounced back above 2194.00 to resume the morning rally. Room up to the 2197.00 bias-up signal was fully utilized. And despite the bias environment already lapsing when tested, its resistance held.
The morning rally, and the morning, both have ended. And another sell signal triggered under 2192.75.
Now this morning’s 2187.50 bias-down signal no longer need hold as support. But it’s trying. This afternoon’s 2189.00 bias-down signal triggered, putting into play its 2182.75 bias-down target. But touching 2187.50 has bounced to test 2189.00 as resistance.
The drop is likely to resume if the reversal isn’t recovered as the bias environment begins lapsing at 2:30 (when I will no longer be in front of the screens). And the bias-down target is just interim support on the way down to 2181.00.
Meanwhile, Gold (and Silver) and the Euro are threatening to bottom, if their earlier recoveries from this morning aren’t derailed. Could be very interesting into the close… Have fun!
Look ahead: Economic Calendar – for Mon Dec 5, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The econ calendar is relatively busy for a Monday. And that’s not even including the three Fed speakers staggered through the day..
Gallup US Consumer Spending Measure
8:30 AM ET
*William Dudley Speaks
8:30 AM ET
*Charles Evans Speaks
9:25 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
Labor Market Conditions Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET
*James Bullard Speaks
2:05 PM ET