Market Wrap

Already upon entering Tuesday’s last half-hour, trending any further before the close had become unlikely, although the greater vulnerability remained to the downside. Choppiness persisted through the close anyway, suggesting that the sideways range is not stable. Overnight parameters and opening scenarios are discussed in the Wrap.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday’s close above 2134.00 undermines the trend change setup. Most other elements of the intraday rally were were not bullish.

The recovery stopped short of Friday’s 2157.50 opening print, which is both a natural attraction and resistance. Last week’s “higher prior lows” were tested, neutralizing their attraction above. Only the bias environment exit probed higher so no traction was gained for the effort, meaning that the day’s buyers were fulfilled. The overnight low at 2100.25 was the least bit pessimistic to qualify as testing “lower prior highs” which is potentially bearish from a contrarian perspective. And the overnight low was complex enough to qualify as a “new Globex trend extreme” requiring intraday retest.

The gap back to Thursday’s 2173.00 close doesn’t require being filled, but probably will be filled anyway if Tuesday’s open were to maintain a gap up. Gapping down under Monday afternoon’s 2130.50 low would form a “session-long decline” setup, but that’s not the only path down. Signals are too mixed to be overwhelming in either direction.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday’s session finally provided a capitulative leg, the last half-hour’s 17-point slide into the close. It was only slightly larger than the 15-point break out of the noon hour, and only slightly steeper. But any hesitation was narrow and momentary.

While capitulation is known for accompanying bottoms, that’s not usually the case on Fridays. And anyway, capitulations can form a bottom’s entry, but the bottom must still have time to form. That may be moot, since the pattern on a Friday is likelier to be duplicated on Monday — gapping down and trending down sharply.

Gapping up is possible, but not enough to reverse the trend up. Extending down could find a near-term low, or else put Friday’s decline to shame. We’ll discuss the signs for each, and their potential, at the weekend’s Saturday Review.

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

Monitor overnight Globex trading in the chaRTroom here.

Thursday’s gap down remained in negative territory throughout the day. The session probed under the prior session’s low. It would have been more pessimistic to actually close under the prior low, so Thursday’s session was “ineffectual pessimism.”

This tends to resolve in one of two ways. A bearish resolution would gap down for a delayed confirmation of what originally had been ineffectual. The bullish resolution would gap up and trend higher, however durable or temporary that might be. Since no traction was gained Thursday, trending at all Friday morning must begin by gapping beyond Thursday’s range anyway.

The only “unfinished business” left outstanding is below at  2167.25. Testing it overnight could be recovered before the open, but Wednesday morning’s Pivot Reversal already makes a Friday morning recovery unlikely. So, Friday’s two likeliest scenarios are either gapping down and trending lower into the weekend, or else a weak rally effort that fails, and reverses down through the afternoon.

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday morning trapped shorts. Gapping down slightly to 2181.50 was recovered to probe slightly above Tuesday’s prior high to 2186.75. The recovery was rejected resoundingly, reversing down through the noon hour to test support at the morning’s 2177.75 bias-down signal.

Ending the session there would have formed a bearish Pivot Reversal setup. It’s still bearish, so long as the initial rally’s peak wasn’t recovered through the close. It wasn’t. So, spending the balance of the session rallying89 points to 2185.50 wasted buying pressure.

More so, 2185.50 neutralized the afternoon bounce’s attraction. And no traction was gained for the effort. Gapping up Thursday above Wednesday morning’s 2186.75 high could still probe higher during the morning, and would still be vulnerable to rejection. Meanwhile, probing under Tuesday’s 2177.50 low is likely Thursday.

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

Monitor overnight Globex trading in the chaRTroom here.