Market Wrap

Today’s market Wrap was held one hour early at 3:03 PM ET…

Monday afternoon’s 2182.00 bias-up signal was finally touched, but too late for its resistance to crumble. Not actually probing it — not stretching the rubber band tightly — avoided reversing the trend back down. Its reaction did test the noon hour’s 2179.25 low and bounce back into the afternoon range. The last half-hour was greeted by a slightly deeper test that fluctuated widely around the noon hour low.

No traction had been gained by the afternoon timing windows. So, resuming the morning’s rally requires gapping up Tuesday above Monday’s 2182.00 high. Extending down overnight need not resume last week’s decline, but retesting last week’s lows would likely break lower. Monday’s bounce was not the product of accumulation. It was only follow-through from Friday’s oversold test of support from filling the three-week old gap back down to 2160.00.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday ended with bounce, sizable by most standards, but somewhat tame compared to the intraday action preceding it. The three-week old gap back down to 2160.00 had been filled down to 2157.50, but no new sponsorship was able to extend that into a new downleg. Its reaction up attacked its 2170.75 target to within 2 ticks.

And where was the close? At 2168.00. Not above to indicate that sellers had lost traction, and not under it to put into play lower objectives. AT 2168.00.

Closing under 2177.00 has indicated the massive topping pattern is probably rolling over. Closing under 2168.00 would have indicated it is extending down. And under 2156.50 would tell us that extension is targeting a test of 2141.50. At a minimum. Gapping up Monday above 2188.00 would give the pattern another opportunity to probe fresh highs first.

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

Wednesday’s last-minute 7-point bounce peaked 1 point short of 2177.00. Its recovery would have kept alive potential for the drop from Tuesday morning’s high to have been only a correction, prior to resuming the rally. Closing under 2177.00 instead suggests the drop has been the beginning of the end, completing the massive topping pattern we’ve been monitoring.

Having failed to close back above 2177.00, recovery potential can be reinstated by gapping back up above the 2180.50-2181.25 area. That wouldn’t ensure new highs, and would remain vulnerable to attempting another downleg. Wednesday’s attempt at a new downleg is still subject to confirmation from a second consecutive lower close.

The Schrödinger’s cat setup.

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

Monitor overnight Globex trading in the chaRTroom here.

There is no unfinished business above. Last Monday’s high was barely pierced, but simply touching it would have fulfilled its required retest. Drifting lower from there throughout the day doesn’t suggest the uptrend’s momentum has lapsed, or that new counter-trend sponsorship has arrived.

But reacting down instead of trend higher was more relevant for what it prevented. Not trending above last week’s high avoided a clean breakout. Closing above the interim range doesn’t qualify as a breakout, but extending higher Wednesday could marginalize sellers in the near-term.

Otherwise, a top continues forming. Breaking back down without further delay would be an entirely credible start to a durable downleg. But probably only if gapping down, since sellers didn’t gain traction for their efforts Tuesday.

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

Monitor overnight Globex trading in the chaRTroom here.

Last Monday gapped up and quickly extended to new highs, spending the entire session above prior highs. That was followed by gapping back down under prior highs, and resuming the ranging that had preceded Monday’s failed breakout.

This Monday is in stark contrast. It was an “inside day” relative to Friday’s range. Five trending efforts alternated between up and down, and that was before even entering the afternoon bias environment. I dismiss that later legs because of their smaller sizes.

Also, this Monday ended almost unchanged, compared to last Monday’s gain. Does that difference, or the others, mandate any different resolution this Tuesday? No, the range and its choppiness can persist. But trending through either end of the range remains likely eventually, and possible during any timing window.

No traction was gained by either sponsorship Monday, so trending Tuesday morning must begin by gapping beyond either end of Monday’s range. Oversold RSIs at Monday’s 2175.00 late-morning low require an eventual retest, which would likely extend down several points deeper to 2172.00. Breaking lower could be easily satisfied, or not. Breaking higher would target new highs.

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

Monitor overnight Globex trading in the chaRTroom here.