Market Wrap

Friday morning’s probe above Thursday’s highs must fail. Thursday’s rally had gained no traction for its effort, and only gapping up above it would have been durable.

Friday Factors inhibited trending back down. Probing a fresh high Friday afternoon would have all but required snapping back down already.

Probing fresh highs Monday can’t be discounted, but would be no different than if done Friday afternoon. Except that the consequence for weak-handed buying is now greater. — not only retracing back into Thursday’s range, but retracing its lows.

Meanwhile, despite probing fresh intraday highs in the afternoon, a Friday breakout was avoided. Not for lack of proximity, as the entire afternoon was there. But the cash session close was under prior highs, so no additional higher close is required.

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Did Thursday recover from 2153.50 to 2167.50 in anticipation of favorable earnings surprises after the close from AMZN and GOOG? Or, was the recovery inhibited by the earnings timing? Probing 5 points above the morning’s high still stopped 1 point short of the 2168.50 overnight high. Pessimism is potentially bullish from a contrarian perspective.

Greeting Friday’s open at or above 2168.00-2169.00 wouldn’t be a first. There are 4-5 prior instances in the past week. Extending above it would be a second. Sunday night did it. But still being in proximity of fresh highs at 2175.50 still makes its test the likelier resolution.

Thursday’s rally didn’t gain traction, so extending higher Friday morning probably depends on gapping up. Assuming fresh highs are even probed (for a change), we’ll be looking at the close for a new trend high, or not. It has special meaning on Fridays.

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Wednesday afternoon’s recovery from the FOMC reaction rallied nearly 15 points to attack 2167.00. That’s after initially plunging from 2160.00 to 2152.00.The selling may seem repudiated, but Wednesday’s close dipped back down to 2160.00.

FOMC’s non-bearish news is out, and its relief rally has elapsed. The rally is back on its own. Proximity to the highs, and to retest 2171.25 up to 2175.50, makes another downleg unlikely to extend. But being unlikely to extend doesn’t prevent another downleg from developing or from extending.

Probing fresh highs first would still be vulnerable to a more durable reaction down. But we’ll need to see how those highs develop before having any confidence in the peak.

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Monitor overnight Globex trading in the chaRTroom here.

The open’s 5-point surge to 2168.00 had reacted down 4 points before the morning’s 10-point plunge to 2154.00. Bouncing into the noon hour retraced the plunge, but only the plunge, before an afternoon drop to 2156.00. That was also recovered to 2164.00.

Only to 2164.00. Even that reacted down into the close, which was fluctuating around unchanged. Tuesday ends without momentum, and without traction, despite its 14-point range — which one leg traveled in 90 minutes.

The proximity to fresh highs is further than the prior two closes. Only a little, after plenty of selling pressure had tried breaking lower, with plenty of time to get it done. I can’t get fresh highs (2171.25, 2175.50) off my radar, not without gapping down under Tuesday afternoon’s 2156.00 low, which isn’t likely ahead of Wednesday’s FOMC policy statement.

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Monitor overnight Globex trading in the chaRTroom here.

The week began by falling back into the same range as last Tuesday’s horrible session. The template behaved the same way this week, with Its quicksand keeping price down for much of the day, and a last-minute recovery lifting out of the range.

There is now no bullish reason to revisit Monday’s 2156.00-2158.00 lows. Probing lower would intend also to break under last week’s lows on the way to a much deeper level.

Almost any initial strength Tuesday would be likely to probe fresh intraday highs, retesting Sunday night’s highs up to 2171.25  and 2175.50. They don’t require intraday retest, but their retest is likely, anyway.

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

Monitor overnight Globex trading in the chaRTroom here.