Market Wrap

Wednesday’s frustratingly narrow 3-4 point range finally started breaking as the 3:37-3:52 position-squaring window opened. And it wasn’t only noise, as fresh post-open highs were probed up to 2267.25. The breakout’s late timing and its shallow measurement undermine its credibility. But maintaining through the close suggests it’s not a false breakout.

Regardless, the proof of a false breakout, or not, will be similar to conditions established for the prior close. The bullish scenario is likely to be an overnight rally, gapping up to extend to new highs intraday targeting 2278.25. The alternative is likely to have stretched the rubber band, so that Thursday morning can snap back and trend down to fresh lows under 2248.50.

WedEX did not form a setup. Its several inputs seldom all present, but a signal can be derived anyway. Its basis is required, which can be trending or intraday probing of a relevant prior high or low. That has not formed in this week’s narrow range so far. Gapping open substantially on Thursday could qualify by proxy.

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

Monitor overnight Globex trading in the chaRTroom here.

The 2257.50 overnight low’s retest held as support. At least 1-minute RSI diverged positively on the low. For now. Its reaction up probed above the 2260.25 buy signal, but only while also overlapping it. It wasn’t quite triggered, let alone rejected. Extending higher overnight would be credible, gapping up back above Friday’s 2266.00 low to try isolating Tuesday’s probe under it. Otherwise, resuming Tuesday’s drop would at least retest last Wednesday’s 2255.00 low, which is the range’s pivotal low whose break could point sharply lower.

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

Monitor overnight Globex trading in the chaRTroom here.

Thursday afternoon’s traction was fulfilled not just by Friday morning’s surge, but by maintaining its probe above Thursday’s highs. Thursday’s entire session had developed in negative territory, so it was a weak base for launching a rally. Perhaps that was as responsible as pre-holiday illiquidity for inhibiting the surge from extending higher. Regardless, it will be partially responsible for causing this leg to reverse down sharply if first extends to probe new highs.

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

REMINDER: No Saturday Review this weekend. Try to enjoy the weekend, anyway!

Thursday’s intraday rally from 2248.50 eventually touched 2267.00. It gained traction by exiting the bias environment above the noon hour’s high, and then entering the final hour higher. But it didn’t recover Wednesday’s 2270.50 close, so the traction doesn’t prevent an interim drop.

The traction does help to absorb an interim drop, and to reverse it back up into positive territory. Otherwise, rallying would have required gapping up. Meanwhile the traction helps to limit an interim drop. A relatively shallow temporary dip could test 2257.50 or Thursday’s noon hour “lower prior highs” at 2254.25, and still recover.

A deeper pullback, and a delayed recovery, would still target 2247.50. It was attacked to within 1 point Thursday, but now actually testing it would be difficult to hold.

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

Monitor overnight Globex trading in the chaRTroom here.

The recovery from this afternoon’s 2255.75-2256.75 lows extended higher through the close, and attacked 2272.00 to within 1 tick. That level had been the likely objective of Tuesday afternoon’s false break higher. It was the potential attraction to rallying Tuesday night, had a rally ever gotten underway. More important than resistance, it is the delineation between rallying to new highs, and rejecting new highs. If ever new highs above 2278.00 were tested, then closing any day back under 2272.00 would be another signal of a top forming. There’s still a new trend high close likely in the mix, but the market usually finds a way to satisfy all requirements before launching a reversal.

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

Monitor overnight Globex trading in the chaRTroom here.