Market Wrap

It shouldn’t be surprising that 2240.50 essentially defines Tuesday’s afternoon’s low. Breaking under it on Friday had put into play a complete drop through the entire 2230-handle.

A multitude of elements require that it break again — not necessarily all the way back to Friday’s lows, and not necessarily holding Friday’s lows if tested. None of which prevented breaking higher during Tuesday’s 3:37-3:52 position-squaring window.

Sharply higher. Potential to 2252.25 was reached by the final bar. Price still sits there now. Neither sellers nor buyers had gained traction before the late surge, so gapping down under Tuesday afternoon’s 2240.00 low could form a “session-long decline” setup. Any shallower opening dip could extend the recovery Wednesday morning.

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

Monitor overnight Globex trading in the chaRTroom here.

Happy New Year’s!

Whether it was a warning or a promise, it came true: The year’s last trading day was worth sticking around for. Unlike other three-day weekends, there’s business to be done, right up to the bitter end.

The session’s decline didn’t find an air pocket. But selling pressure was relentless, anyway. And it trended, in a series of lower lower lows and lower highs.

Starting at the morning’s 2248.00 bias-up signal, with its sites set 2230.00-2232.00, the target was met, even exceeded by more than 1 point. Its upper-end was still being tested at the cash session close, and then higher to 2237.25 into the futures close.

Any “unfinished business below” that was neutralized Friday was also put into play Friday. So, once again there is no unfinished business below. And once again, that need not prevent trending down deeper anyway. Attractions below at 2215.00 and potentially 2205.00 could be met as the week/month/year begins.

Gapping open above 2239.00 would all but reject the late drop, and reverse momentum up. Sellers did gain traction Friday — the bias environment was exited under the noon hour’s low, and the final hour was entered lower — so gapping up would be bullish.

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

REMINDER: There is no Saturday Review this weekend due to the holiday. Please have a safe and happy New Year’s celebration!

It remains to be seen whether or not there’s an air pocket below. There was room under the 2243.00 prior low down to 2240.50. It was tested once, by 1 point, by the first bar probing under it, and during the noon hour. So, its test held.

Probing under it, instead of only overlapping it, would have revealed the air pocket with multiple consecutive large downbars. No specific alternative resolution was required in the absence of an air pocket. The afternoon bias environment attacked its 2247.00 bias-up signal, and the balance of the session ranged sideways.

Although not obvious by only firming back up to unchanged, Thursday neutralized the last of “unfinished business below.” But momentum didn’t reverse up by only firming back to unchanged. There are unusual influences at year-end, unrelated to volume evaporating ahead of the holiday weekend. And those influences could still trigger trending on Friday.

Great suggestion regarding the Market Wrap… Pause the recording at the presentation’s end, then finish recording at the close so it is included in the video. I’ll start that on Friday, thank you!

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday ahead a three-day holiday weekend is similar in principle to expiration. That’s when we look for specific clues at the close to forecast any bias or trending into and out of the weekend. We do that on Wednesday because it’s the week’s most liquid session, so big money / strong hands is most active.

There’s nothing predictive ahead of a holiday, but it’s still the week’s best liquidity. The 24-point session-long plunge on this Wednesday is being blamed on institutional selling pressures. And that is perfectly plausible. It’s not in reaction to a news event that can be discounted or resolved. Its lifespan could last the week.

Meanwhile, the next lower attraction at 2243.00 which requires a retest was attacked to within 2 ticks Wednesday afternoon. That doesn’t qualify as neutralizing oversold RSIs. Its actual test could be isolated to the overnight, or to Thursday’s opening 15 minutes of volatility, clearing the way for reversing back up. Gapping up above 2250.00 could extend higher, too. Otherwise, there is greater potential for extending down to 2215.00 and 2205.00.

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

Monitor overnight Globex trading in the chaRTroom here.

[We’ve begun starting daily Market Wrap before the close at 3:33pm ET. Other tweaks are coming soon. Please share your feedback in this blog post’s comments section or email me directly. Thank you!]

Tuesday’s resolution was disappointing. Partly for the promise of the open’s surge, which set quite a different tone for the day than its result. Not diametrically different — the trend didn’t reverse back down. But the session was spent retracing the open’s surge, not extending it.

Tuesday’s closing action didn’t make a rally any easier. The afternoon had repeatedly held 2264.75 support, but broke it down to 2261.50 through the futures close. The cash session close equated to 2264.00, preserving enough of the open’s gain to avoid rejecting it.

So, is the rally resuming? Probably. And its objective is to retest the 2273.00 high, up to 2275.50 or 2278.25. Otherwise, Tuesday’s opening surge can still be rejected by gapping down Wednesday under 2259.00. This would suggest that Monday’s rally was no more predictive than last Thursday and Friday. And it would suggest that last Thursday and Friday’s lows will be probed, below 2249.50 and 2243.00.

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

Monitor overnight Globex trading in the chaRTroom here.