Market Wrap

Thursday morning’s probe above its bias-up signal was no-bias trending, doomed to failure. That was already retraced back to its 2350.50 bias-up signal, and also 5-6 points lower where the 10:15 no-bias signal had triggered. But “unfinished business” was left outstanding at the overbought RSIs of its 2356.00 high. It’s only an errant tick, but it requires an eventual retest.

Unfinished business below remains outstanding at Wednesday morning’s 2331.00 bias-down target. It may be met without much delay, since Thursday afternoon’s sellers gained traction by exiting the bias environment under the noon hour’s low, and the proxy window trended down to fresh session lows.

A “failed ascending triangle” is forming, which I review graphically during the Market Wrap video. The pattern tends to resolve sharply lower. And that sharply lower resolution tends to form a more durable low. The 2331.00 attraction could be probed to 2327.00, or to 2317.00.

Meanwhile, Thursday afternoon’s 2352.00 high formed too late for gapping above it Friday to form a “session-long rally.” However, gapping up above 2352.00 would invalidate the traction that Thursday afternoon’s sellers gained. And while not a session-long rally, it would still be credible for extending higher — perhaps not relentlessly, but marginalizing sellers into the weekend.

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday’s bias-down signal was confirmed by probing under its pre-10:15 low. But its 2331.00 bias-down target was attacked to within 2 points before a sudden 15-point rally reversed the bias environment’s trend. Even that was too shallow to invalidate the bias signal, so 2331.00 is “unfinished business below.”

The afternoon’s 2336.75 bias-down signal was touched coming out of the noon hour. Sellers didn’t exploit the proximity and timing to trigger bias-down. Which buyers exploited by trending back up through the afternoon to probe the morning’s 2348.00 high.

Wednesday may seem to have fulfilled a Wreversal Wednesday setup. But its initial dip was briefer than the setup should have lasted, and its recovery was shallower. Already extending higher Thursday morning would still be credible for a bigger bounce. But a durable bottom would first hold a test of 2331.00.

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

Monitor overnight Globex trading in the chaRTroom here.

Tuesday’s pattern never broke its series of lower lows and lower highs, i.e. downtrend. Two attempts were made, at the noon hours entry and then at the afternoon bias environments exit. Both resolved down into fresh session lows.

Noon’s reversal attempt would have been doomed eventually, due to oversold RSIs at the morning’s low requiring an eventual retest. The afternoon’s reversal attempt would have been substantial, had it made itself obvious by the 3:10-3:20 proxy window. Failing to exploit that all but required fresh session lows.

Futures ultimately recovered back up to 2342.00, not closing under the decline’s objective. Recovering it decisively would have been a reason to suspect Tuesday’s drop is temporary. There’s also the anchor at the open’s high, and Monday’s unfinished business above at 2380.00.

Could this be a Wreversal Wednesday? Often, the path up must first extend down. Extending down a little could bottom at 2335.50. Extending down a lot could reach 2327.00 or 2317.00. Two Fed speakers this evening might try talking up the market, or might facilitate testing lower targets overnight. Regardless, gapping up above Tuesday afternoon’s 2349.50 high after trending trended down into its close could form a “session-long rally” setup.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday morning’s attack on the 2368.75 overnight low had held its 2369.50 objective. Quickly reacting up to 2376.00 — retracing the open of Friday’s position-squaring window — was the extent of any residual bullish WedEX influence. It didn’t extend, but it left no unfinished business below.

That didn’t prevent probing fresh lows, anyway. Reversing back down into the noon hour and out of the afternoon bias environment probed lower and lower under 2370.50, the origin of Wednesday’s FOMC reaction. Closing back above it would suggest there’s no bullish reason to probe under it again. It was still being overlapped at the close.

The final hour did begin forming a trend reversal up. That’s not an optimal window, and only one higher high and higher low formed which is not an optimal reversal. Meanwhile, sellers gained traction, and could extend the decline to test 2342.00. Gapping up Tuesday above 2374.00-2376.00 would be a big step back to new highs.

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

Monitor overnight Globex trading in the chaRTroom here.

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Friday afternoon’s 9-tick probe above its 2380.00 bias-up signal was required to retest 2380.00 as support, if not also 2379.00. Both were fulfilled going into the final hour.

But the bullish WedEX did not reassert itself. The reaction down extended, back to the morning’s 2375.25 bias-down signal. And through it momentarily, touching a fresh low under 2373.00.

The bullish WedEX had been fairly influential. Reversing the afternoon’s uptrend didn’t begin until the final hour, so the influence can’t be dismissed entirely. A more aggressive bullish influence Monday morning remains likely.

Nevertheless, no hold-long was considered, since Monday’s open isn’t prohibited from gapping down. WedEX influences post-open action only, so rallying would be more reliable at or after the open, instead of before it.

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

This weekend’s Saturday Review begins at 9:30am ET. I’ll send links early in the morning.