Market Wrap

Naturalizing the Wednesday’s “unfinished business above” at 2362.50 overnight was vulnerable to reversing down. Which it did. Reversing down into Thursday’s open was vulnerable to trending down. Which it did not.

And since trending down Thursday morning had been likely to almost literally implode, consolidating the gap down soon marginalized sellers. Bouncing kept the door open to probing higher. Even failing to trigger the 2362.50 bias-up didn’t prevent “no-bias trending” to fresh highs.

The prematurely broken bias-up signal was retraced down to 2359.00 at the noon hour lows. The morning’s “unfinished business below” at its 2351.75 bias-down signal remained outstanding. Instead, the afternoon bounced, stopping pessimistically short of touching the morning’s highs. Trending higher was possible, but it didn’t.

Once again, reversing down has only a limited window of opportunity to exploit. So, not trending down abruptly at Friday’s open would suggest extending the rally into the weekend. And fresh highs can be probed overnight and rejected into Friday’s open. The only unfinished business outstanding is below.

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday’s relatively shallow gap down ranged relatively narrowly. But its bias was upward, albeit choppily, and “unfinished business above” was left outstanding at 2362.00.

Resolving up in this setup should begin by almost literally exploding higher. There is essentially an air pocket up to 2369.00. Similarly, resolving down from this setup instead should almost literally implode down. Unfinished business below and lower prior highs at 2339.75-2342.25 are the likely attraction.

Wednesday differs in an important way from Monday and Tuesday. The two prior sessions had created upside objectives that were neutralized before the close. But the upside attraction created by this most recent session was left outstanding. That’s 2362.00, and neutralizing it overnight could launch a reaction that trends down Thursday. Trending down first would have that upside attraction outstanding to rescue it later.

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

Monitor overnight Globex trading in the chaRTroom here.

“No-bias trending” isn’t usual, but it’s normal for strong hands to occasionally not defend against a weak-handed breakout. Retracing the broken bias signal is the normal consequence. Tuesday morning’s no-bias trending was unusual, since both bias signals had been touched before triggering no-bias.

And its consequences remain outstanding. At least Tuesday morning’s 2342.25 bias-up signal requires a retest, if not also the 10:15 2339.75 print. Both due to Tuesday morning’s no-bias trending.

Wednesday morning is vulnerable to trending back down, anyway. Tuesday afternoon, like Monday afternoon, didn’t gain traction for its rally. The afternoon’s 2357.00 bias-up target was met and held, probed too shallowly to create any anchor. The bias environment exit reversed back down through the close to 2351.00.

Tuesday overcame the lack of traction in an atypical way. Wednesday could overcome it by gapping up above Tuesday’s 2360.50 high. There’s essentially an air pocket up to “higher prior lows” at 2369.00. Any less opening strength would be likelier to extend the pullback.

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

Monitor overnight Globex trading in the chaRTroom here.

It seems the biggest impediment to fulfilling Monday afternoon’s bias-up target was the bias-up environment, itself. Before even triggering the 2335.50 bias-up signal, the 2341.50 bias-up target had been attacked to within 1 point. And the bias-up environment’s reaction continued to 3 points under the bias-up signal at 2332.50.

Eventually, the bias environment lapsed. A recovery began immediately, and didn’t stop until touching the 2341.50 bias-up target. Then the recovery did stop, reacting down to 2337.00 through the close.

No “unfinished business above” was left outstanding. The gap back up to Friday’s 2342.00-2345.00 close will want to be filled, but it’s only an attraction and not a requirement. The open’s 2321.00 gap under the prior lows will want to be filled, as much a requirement as an attraction.

Monday’s post-open rally gained no traction for its effort, which leaves the door open to another dip. But closing above 2331.00 after testing 2317.00 2327.00 intraday does suggest that an intraday dip would recover — whether from 2321.00 or 2311.00.

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

Monitor overnight Globex trading in the chaRTroom here.

Thursday’s sellers had gained traction, suggesting that Friday morning would probe lower. But Friday morning gapped up and extended higher, triggering the 2346.75 bias-up and fulfilling its 2352.25 target. Nevertheless, not gapping up Friday above Thursday afternoon’s 2352.25 high had itself suggested a repeat of Thursday morning’s failed rally.

In fact, Friday morning’s bounce peaked at almost the same time and resolved down to fresh session lows, as did Thursday’s. Both drops gained traction, albeit differently. One difference is that Friday’s drop left “unfinished business above” at the afternoon’s 2345.50 bias-down signal. Probing under it prematurely was “no-bias trending” that required being retraced.

And it was retraced, after the drop had extended to within 3 ticks of the unfinished business below at 2331.00. Then another headline leveraged the position-squaring window, triggering another knee-jerk reaction up. Its 13-point surge probed 2345.50 by almost 2 points  Unfinished business above AND below was neutralized within minutes of each other.

The balance of the session ranged choppily sideways. But it left an interesting pattern behind, projecting interesting action ahead. We’ll review it in detail at this weekend’s Saturday Review.

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