Post-open Review… Back-to-backing-and-filling?

Gap up reacts back down. Which reacts back up.

Yesterday’s rally didn’t gain traction for its efforts. So, gapping up above yesterday’s highs was the only way to rally credibly this morning. Gapping up, and extending.

But the gap up held its test of 2397.00 “higher prior lows” and reacted down.

Natural support was found upon filling the gap back to yesterday’s 2392.50 close. RSIs diverged positively, producing a bounce that failed to recover the 2395.25 bias-up signal.

This is a no-bias environment. Holding a test of the bias-up signal put into play an offsetting test of the 2388.75 bias-down signal.

That objective below is became suspect when the bounce tested the 2395.25 bias-up signal. By 3 ticks. But still overlapping it at 10:30 failed to invalidate what was triggered cleanly and timely at 10:15.

That said, beware of being short above 2396.00, because the bounce’s rejection isn’t optimal. Back under 2394.00 would signal the break lower has resumed.

The First Trade & Pre-open Tour Recording… Hardly skipping a beat.

Proper context can start the day with a solid win and make all the difference.

First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Monday took three steps higher and higher, but each step was shorter and shorter. Gapping up to the overnight range’s 2385.00 high immediately extended to attack 2391.00. That was retraced entirely before rallying again into the noon hour to test 2393.00. Essentially hovering at the highs was resembling a “Wile E. Coyote moment,” vulnerable to collapse. Yet one more shallow correction was recovered to probe slightly higher at 2394.25 before the close.

Overnight action’s new info…
The intraday pattern repeated with one more fresh high, the shallowest yet by only a 2-tick margin. Sadly, that resolved in the collapse described earlier, due to terrorism at a concert in Manchester. The 8-point slide to 2386.75 was consolidated into Europe’s opens, which triggered a surge to fresh highs attacking 2398.00.

If, then…
Monday’s bearish WedEX influence was limited to retracing all of the post-open gain. But quickly resuming the rally prevented forming a solid base. And now the room for extending higher up to “higher prior lows” around 2397.00 is being tested. Not extending almost immediately through 2399.00-2401.00 would be vulnerable to another complete retracement back down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2397.00 would be likely to trigger the 2395.25 bias-up signal at 10:!5. Exiting the open under 2391.00 would be unlikely to trigger bias-up.

Phonetic dictation…
good morning and welcome it is Tuesday 10 / Tuesday’s market tour and interesting reaction here not sadly not a great reaction here so I don’t know that we can really draw the two together but the fact is that yesterday afternoon price action yesterday afternoon was I was criticizing it or characterizing it at least as the Wylie Coyote moment we had been searching for tracing and the retraced move the entire wood Trace them back to the opening print if that was it and it’s through the bias environment exit if that was influenced by the bearish wed x to the degree that was influenced by the Bears win X the complete retracement back to the opening friend then that is the end of the Burruss wedding in any case because its influence begins Friday afternoon and ends after Monday morning however immediately recovering from that retraced man didn’t allow any kind of a base to form so that doesn’t make terribly horrible base to try extending higher but it is suspicious anyway and that suspicion is someone confirmed when surgeon to have fresh hi then runs out of its own sponsorship runs out of its own sponsorship that is more so rather than pulling back constructively just hovers again like that I kind of scene of Wylie Coyote being let off the cliff by Roadrunner hovering there in literally sustained animation momentarily and then gravity sucks and down last minute surge or piercing buy a couple points I have been a couple points or traced back into the ring and then sadly the overnight at the Ariana Grande concert terrorist attack suicide bomber drives price down 8 points from that surge Peak so price does collapse it does though by collapsing do what yesterday’s new Howard Stern’s didn’t do in reaction and that is correct actually dig deeper into and not just tangentially barely into the retreat the mornings verus Wade extra Trey Smith so what do we or another the market does what it’s supposed to do to get where it wants to go and in this case he had completed its correction Consolidated it Consolidated it through right into actually Europe’s opens which triggered an extension of the rally but concerned apparently being over there more geared toward successful quelling or ending of the terrorist incident good for them so anyway what was the likelihood or potential that is what was the likely objective higher Pryor lives up here 2397 area as I said yesterday instead of just the area or at least not triggering that is to buy ass up there for putting into play if especially if tested Post open the 23 9525 bias up signals tested Post open but not triggered putting into play the oxygen test of the bias down signal message drop back to 8875 but trigger buy a sub 23 9525 will give her every benefit of the doubt to being able to at least absorb backing and filling you know yesterday morning triggered by us up and then spent the balance in the morning backing and filling didn’t fulfill its bicep Target in till the afternoon so that’s possible today not likely to repeat the same setup but so that’s possible or actually to extend higher and buy us up as biased not limited to the bias of Target any questions let me know coming or not and it has isn’t indicated at this point but if today were too close even higher then that’s not it self confirmation but to take out 6150 again after it had been influential with really undermine the downside the same set up a different price points basically no higher price for silver but a close above last Wednesday’s high that had formed an island that had reacted down in the formation of an island that is recovering to resume the rally remember islands are always were tested whether it’s to form a more significant top or to resume the trend that led to it so either that’s what is developing here that is resuming the rally or the retest Wednesday size going to hold and that’ll format top kind of hesitant here at the time at this time long Bond nothing no reason why they consolidation 2 + day consolidation can’t now resume the rally it’s starting to get a little late little delayed in resume in the rally and crude oil which confirmed a break out yesterday I break out of this multi-session range this is July now requires there to be an eventual at least one eventual third I are close so I said over tradesmith this is where that knowledge comes in handy you know when the breakout is confirmed immediately which is what confirmation is and then immediately fulfills the eventual require third higher clothes there goes that predict ability that we can otherwise rely on but here the pattern is immediately were tracing and we know there’s an eventual third are closed likely and that makes it easier to buy support like this afternoon .

Morning Bias

TUE morning signal (triggered at 10:15 ET) SPX ES
Bias-up: above  2396.50 2395.25
…would target  2402.25 2401.00
Bias-down: under  2390.00  2388.75
…would target  2384.75  2383.50
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.

Market Wrap (recording & summary)

Gapping up Monday to 2385.00 didn’t delay extending through Friday’s 2388.00 high. That was before the morning bias environment began. Extending much higher was delayed until the bias environment began lapsing. But it was worth the wait for a relatively quick move to 2393.25.

Then, another delay. But also worth the wait? Much of the noon hour, the entire afternoon bias environment, and also the proxy window, all ranged narrowly. The position-squaring window finally launched a break higher.

But that break was less than 2 points up to 2394.25. And it spent the proxy window only fluctuating around the noon hour’s high. Reacting back down to 2391.00 began too late to be serious, and was retraced back up to 2393.00.

Probing higher overnight has room up to the 2397.00 area before suggesting the rally will resume Tuesday. Otherwise, that Wile E. Coyote moment keeps the door open to greeting the open with a collapse.

Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

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 Jun Contract (EC, ETF: (FXE, UUP))
Trending up Friday made fresh highs likely Monday morning, but didn’t prevent their rejection. The gap up was maintained, just short of resistance at 1.0286.

Gold Jun Contract (GC, ETF: (GLD))
Gapping up Monday tested 2356.00, the level that had failed to support Wednesday’s reaction down from 2361.50 “higher prior lows.” Monday extended back up to 2361.50, which must be rejected Tuesday back under 1250.50 to resume the decline.

Silver Jul Contract (SI, ETF: (SLV))
Sunday night’s spike up through Wednesday’s high didn’t so much negate the Island pattern as ended it. Islands are always retested eventually, either to resume the trend or to end it. Holding the retest of Wednesday’s high would end the trend, which is the recent rally. Closing above it may seal a bottom, needing only the confirmation of also closing higher Tuesday.

30-year Treasury Jun Contract (US, ETF: (TLT))
Monday was greeted by firming that threatened to end the two-day consolidation and resume the rally. The gap back to the 155-13 high remains the objective.

Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Monday all but confirmed Friday’s breakout from a multi-session range. If not rejected immediately, then “higher prior lows” at 53.00 are in-play.

Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Sunday night was maintained into Monday’s open, exceeding Friday’s 3.27 high and extending the detour on the way to fresh lows. The next opportunity to resume the decline would come from “higher prior lows” at 3.34.