Market Wrap

There’s a report of a Russian comminique advising its diplomats to bring home students from abroad. Did that crystallize a concern that was causing Tuesday’s undercurrent of relentless selling? The market’s reaction suggests as much, already having bounced off its 2121.75 low just before the headline crossed, and then extending higher in reaction. I hope we don’t have to start acheter sur les canons, vendre sur les trompettes.

The afternoon’s bias-down did not officially trigger, although that was a very borderline signal. The late-afternoon bounce retraced it, but didn’t close above it. That’s not a sell signal, but it’s certainly not a rejection of the session’s decline. And there’s no opening action Wednesday that can reject Tuesday’s break — the most bullish scenario must probe lower intraday before recovering. The most bearish setup would try recovering prematurely.

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

Monitor overnight Globex trading in the chaRTroom here.

The afternoon decline’s 2156.50 objective was tested and retested, with RSIs diverging positively on the latter. A couple of pops up into and out of the cash session close retraced up to 2159.50. Its recovery during the position-squaring window would have triggered a squeeze. And not closing back at last week’s highs around 2157.50 would have combined bullishly with the open’s gap up. Instead, resuming the rally Tuesday now requires gapping up to and/or through Monday’s 2163.50 high. The alternative would be to back-and-fill lower again.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday’s opening surge stopped short of testing the pre-open reaction to payrolls, which had touched 2161.50. It even stopped short of filling the gap back to last Friday’s 2160.00 area close. The restrained optimism didn’t prevent a steep intraday dip. But it makes me suspect whether the dip can extend.

Already, the reaction’s second downleg has been retraced. That was the 10-point drop which appeared suddenly when the morning bias environment began lapsing. The afternoon retraced it. But it wasn’t actually reversed — and it could have been.

All of which is interesting for anticipating intraday action. The context is somewhat bullish from a contrarian perspective, as rally efforts are stopping short of their failures being predictive. That doesn’t mean continuing to chip away at support won’t eventually break lower, only that recoveries remain likely for now.

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

I’ll send login instructions overnight for the weekend’s Saturday Review.

Perhaps anxiousness ahead of Friday’s pre-open Employment Situation report is responsible for paralyzing Thursday afternoon’s price action. The 10-point surge into the noon hour came to a sudden stop as the afternoon fluctuated choppily within a narrow 3-point range.

Similarly, that same anxiousness would be as responsible for exacerbating the late-morning reaction to headlines (walking back ECB taper talk) that triggered the 10-point surge from a fresh low. So, price action wasn’t predictive.

Some things were accomplished nonetheless. The attraction below at the gap down to Tuesday’s 2143.50 close was neutralized. It’s less likely to attract price down, but also less likely to offer support if retested. Also somewhat of an accomplishment was yet more restrained optimism at resistance around 2156.50. At last an obligatory probe above it becomes increasingly likely.

But there’s not much  more that is new. And there isn’t likely to be, not ahead of Friday’s report. We don’t even do preliminary levels in the blog. But we’ll likely have much to plan at the pre-market Tour.

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday’s session was full of promise. From the traction gained by Tuesday’s decline that would produce downtrending action the next morning, to the gradual recovery after gapping up. Even the last hours breakout above 2156.50 was unfulfilling, extending shallowly up to only 2158.00, and then reacted down sharply to 2152.00 through the close.

But although that late drop was relatively steep and sizeable for the day, it didn’t damage the intraday coiling and pent-up buying pressure. Certainly, the template had been warning the recovery might need a rubber band effect to stretch price down so it could snap back up. But that was earlier, and its late appearance left too little time to attract new sponsorship.

If the intraday restrained optimism is pessimistic enough to be bullish from a contrarian perspective, then not gapping down would be likely instead to gap up. Gapping down wouldn’t necessarily be bearish, unless gapping under Wednesday’s 2149.75 low.

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

Monitor overnight Globex trading in the chaRTroom here.