S&P
Pre-market Tour (recording & summary)
The overnight plunge to 2199.50 has extended its recovery up to 2207.50, where Friday morning’s buy signal had triggered. Gapping down back under Tuesday and Wednesday’s “lower prior highs” is not a threat, so a near-term trend reversal is less likely. That doesn’t ensure resuming the rally immediately, but any retest of overnight lows must be absorbed and rejected quickly to avoid gaining downside traction.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Starting this week on a different note.
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 opening 15 minutes of volatility being glued to 2205.50 suggested almost instantly that the holiday-shortened session would likely not be volatile. Trending would be difficult, although the 2204.25 bias-up signal did trigger. But its 2209.50 bias-up target wasn’t even attacked until 3 hours of a 6-tick range around 2207.50. A last-minute break higher met 2209.50 on the way to attacking 2212.00 after the close.
Overnight action’s new info…
Weekend headlines had backed away from a unified OPEC. Sunday night’s open gapped down to the 2208.00 origin of Friday’s last-minute 3-point surge. It extended down to test Friday morning’s 2204.75 post-open lows, and bounced back up to 2208.00. Headlines of Italy’s bank problems triggered a plunge to 2199.50.testing Tuesday and Wednesday’s “lower prior highs.” Its reaction up tested 2206.00.
If, then…
Only the 2220.00 objective created above 2192.00 was “unfinished business above” as of Friday’s close. Gapping down today would create new unfinished business above at the gap back up to Friday’s 2210.50 cash session close. It’s 2211.50 close would likely be filled, too, having developed on a Friday. The overnight drop is currently reacting up back into Friday’s range, but not maintaining its recovery — gapping down back under Tuesday and Wednesday’s 2202.25 prior highs — would isolate Friday’s new highs and launch a multi-session reversal down.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2101.50 would be likely to trigger the 2205.50 bias-down signal at 10:15. Exiting the open. Exiting the open above 2207.50 would be unlikely to trigger bias-down.
Overnight Globex open is coming.
Is the OPEC deal on, or off? Several headlines this weekend have returned it to its recent up-in-the-air status. Stocks should be affected Sunday night either way. The French primary results may have an effect when Europe opens overnight. The Globex session opens at 6:00pm ET.
Monitor Globex trading in the chaRTroom here.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2213.50 | 2211.50 |
| …would target | 2220.00 | 2218.00 |
| Bias-down: under | 2207.50 | 2205.50 |
| …would target | 2200.00 | 2198.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN 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… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Dec Contract (EC, ETF: (FXE, UUP))
A slightly lower low Wednesday night at 1.0525 was recovered to only trade Friday in positive territory, but that doesn’t qualify as a bottom without also closing above 1.0685.
Gold Dec Contract (GC, ETF: (GLD))
Fresh lows testing the 1170.00 area were recovered into Friday’s open to test the 1188.00 bounce limit. It held, but its reaction down also held 1178.00 whose break would target a fresh low at 1166.00 and potentially end the decline.
Silver Dec Contract (SI, ETF: (SLV))
The holiday’s weakness only attacked prior lows down to 16.15 without creating any requirement for a retest or to probe lower. But an attack on the low down to 16.25-16.30 is likely before recovering above 16.65 to signal a rally underway.
30-year Treasury Dec Contract (US, ETF: (TLT))
Only ranging narrowly Friday neither reversed the decline’s momentum nor extended it. But not reversing it by now has made the decline likely to extend anyway, next targeting 149-28 so long as 154-19 isn’t recovered.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
.Friday’s drop tested the recovery’s initial 46.60 target down to 45.88. The dip should be rejected almost immediately to maintain it being only a temporary correction on the way up to 50.50.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Closing Friday above 3.08 puts into play 3.40. That doesn’t prevent an interim dip triggered which would be triggered under 2.97 and targeting at least 2.69.