Market Wrap

Wednesday’s close was the third consecutive to end at 2275.00. Following Monday’s opening plunge, that might seem like stability. No, it is indecision. The longer that strong-handed buyers don’t sponsor a recovery, the likelier that another downleg to lower lows will be required. Unless Thursday’s open were to maintain a gap up, a test of 2248.50 has become likelier.

FOMC is now history. Earnings announcements have tapered off. BOE announces its policy statement Thursday morning, and then headline risk can pause. That is, until Thursday afternoon, when markets may become paralyzed by anxiousness ahead of Friday’s Employment Situation report.

Actually, volatility preceding FOMC wasn’t very restrained. Neither was volatility following it. Two attempts to break lower each failed — but, from above the morning’s low, which makes the pattern distributive and not accumulative. So, Thursday afternoon volatility can’t be ruled out. Unfortunately, I will be unavailable after noon to annotate it in the chaRTroom.

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

Monitor overnight Globex trading in the chaRTroom here.

The bias environment was exited under the noon hour’s 2268.50 high. But the final hour was entered at fresh afternoon highs to 2271.00. Extending higher through the 3:10-3:20 proxy window would have confirmed traction was gained. It didn’t, but that didn’t prevent extending higher to attack 2277.00 through the close.

The cash session close equated to 2275.00. Again. Not recovered, not broken, by a weak-handed rally. Again. Vulnerable again to reacting down overnight, overcome if extended higher overnight. Again.

Any near-term trending should be obvious before the open, before typical anxiousness ahead of the afternoon’s FOMC statement. The nearby attraction below at Monday’s oversold RSIs is met and held. “Higher prior lows” back to last Thursday and Friday’s 2287.00-2291.00 could both attract and repel price. So, there’s plenty of room for action on Wednesday.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday afternoon’s bounce peaked just after the bias environment began lapsing at 2:30 at 2273.00. Rather than extend higher, the 3:10-3:20 proxy window reacted down to 2269.00. It was too late for strong-handed buyers to push price higher, but that didn’t prevent rallying, anyway.

And not by just a little. Potential to 2275.00 and 2277.00 was fully satisfied at the bounce’s peak. Their potential for attracting price higher into rally mode overnight was suddenly inverted. Now, global participants have a chance to sell a bounce after missing Monday morning’s sell-off.

Oversold RSIs at Monday’s 2263.25 low require an eventual retest. That could be much sooner, rather than later, if Tuesday’s open isn’t already gapping up above higher prior lows at 2287.00-2289.00. Just rallying post-open to higher prior lows would more likely hold their resistance and reverse down substantially

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

Monitor overnight Globex trading in the chaRTroom here.

Friday’s open quickly slid back down from Thursday’s flat 2294.00 close to Thursday’s 2289.50 low. Even another point lower. The open’s dip proved too shallow to have stretched the rubber band enough for it to snap back up much. But sellers were kept at bay anyway, as a bounce up to 2291.25 split the morning.

Another dip attacked 2287.00 before bouncing back up into the noon hour. And lke the post-open ongoing series of lower lows and lower highs preceding it, another dip reversed to the morning’s low. Being so late in the session and difficult to generate sponsorship, the morning’s low was only pierced, and only by an errant tick.

Sellers simply weren’t strong-handed, which tends eventually to be bullish. Meanwhile, strong-handed buyers weren’t found at either Thursday or Friday’s lower lower. That tends to require a more aggressive downdraft. Alternatively, gapping up sufficiently Monday could already resume the rally.

Resuming the rally might only mean probing fresh highs, and then collapsing. The “new Globex trend extreme” left outstanding at 2299.50 doesn’t make the close any likelier to have extended higher. Thursday’s failure to confirm Wednesday’s breakout was a missed opportunity for entrenching the rally. As was the failure to produce a new trend high close on Friday despite being within proximity.

It’s almost as if this rally no longer wants to be entrenched. Which only undermines the effect of fulfilling attractions above — meanwhile, their attraction remains intact. Intact, and likely to be met next, so long as a gap down under 2275.00 “lower prior highs” is avoided.

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

THERE IS NO SATURDAY REVIEW THIS WEEKEND. SEE YOU SUNDAY NIGHT!

Thursday’s unchanged open at 2294.00 offered no suggestion there had been an overnight rally to new highs. But the open’s inability to reverse down probably has the overnight high’s attraction to blame. Complexity while forming the “new Globex trend extreme” at 2299.50 requires its eventual retest intraday.

Probing lower into and out of the noon hour finally bottomed at 2289.50. And a bias-down signal was narrowly avoided. Reacting up to 2294.75 threatened to reverse the trend up. But the threat soon passed, as the final hour’s entry failed to exploit the opportunity to extend higher.

Stronger buyers had not been attracted. The first low wasn’t deep enough, so could a second low steep enough? In fact, the low was attacked to within 3 ticks when the position-squaring window opened. Its test held, but the close was only unchanged from the open.

Perhaps Thursday’s inhibition against resuming the rally was due to anxiousness ahead of several high-profile post-close earnings (e.g. GOOGL, INTC, MSFT, SBUX, WYNN). Well, the earnings are now history. A deeper, steeper dip remains possible, but resuming the rally remains likely, especially by gapping up Friday.

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

Monitor overnight Globex trading in the chaRTroom here.