Market Wrap

The decline’s 2043.00 target had been met, and probed to its maximum room for noise down to 2040.75. It was retraced by 61.8% of the post-open slide back up to 2049.00. The balance of the session could have been spent retesting 2043.00 to form a durable bottom, or to extend down.

But simply retracing 61.8% of the opening slide had started tracking another template. Entering the afternoon’s bias environment above the open would open the door to extending well into positive territory.

The recovery extended to 2071.50, 29 points off the low. But it’s not bullish. Extending any higher wouldn’t have made it bullish. The low was not retested during another timing window, and the open’s gap down was not retested from above.

All of which can be done Friday, but not as reliably to hold and form a bottom. Meanwhile, extending higher Friday morning is possible, but not durably (and probably not by gapping up) due to a bearish WedEX.

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday’s likeliest scenario eventually played out. But its last leg down took awhile before unfolding. And that prevented the potential for an optional leg up.

Essentially, optimism for a favorable FOMC statement proved self-fulfilling, fully discounted upon triggering a knee-jerk reaction up. Quickly reacting back down seemed to put the market into shock — so little reward for longs attracted more buyers looking for a delayed pay-off.

Ultimately, the position-squaring window saw those earlier optimists  running for the exits. The relevant 2063.50 level was being tested at the close, not recovered to start forming a bottom, and not broken to further confirm 2043.00 is in-play.

Bearish WedEX triggered. Not actively bearish, although gapping down Thursday under Tuesday’s 2055.00 lows could do that by proxy. Quickly recovering a gap down under Tuesday’s lows could form a passively bullish signal.

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

Monitor overnight Globex trading in the chaRTroom here.

2063.50 was tested, probed thoroughly, all without closing under it. But it is still in the process of being tested, and did not necessarily hold. So the premise remains that a deeper drop targeting 2043.00 is underway.

No early strength Wednesday would qualify as a delayed signal that 2063.50 had held as support. Gapping up could extend higher before the afternoon’s FOMC events, but that would create “unfinished business below” back down to Tuesday’s close. Delaying a rally until late-afternoon would be credible for extending.

Otherwise, fresh session lows Wednesday are likely — whether that creates another opportunity for 2063.50 to ultimately hold, or confirms that 2043.00 remains in-play.

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

Monitor overnight Globex trading in the chaRTroom here.

Bouncing throughout Monday’s noon hour and bias environment repeatedly resolved in fresh lows. The position-squaring window trended down to close around 2069.00-2070.00.

Pretty good word for the decline, after invalidating higher objectives put into play by the morning’s no-bias signal. Having confirmed with a fresh high opst-10:15, a lot of serious selling pressure was required to exit the bias environment at fresh session lows.

Strong-handed buyers overcome by stronger-handed sellers. Are even stronger-handed buyers next?

A “session-long rally” setup would form by gapping up Tuesday above Monday afternoon’s 2080.25 / 2081.50 bias environment’s highs, having trended down into Monday’s close. Otherwise, extending down would next target 2063.50 and potentially also 2043.00.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday morning’s post-open bounce fulfilled its intention of lulling market participants into complacency before a capitulative afternoon drop. But a capitulation isn’t very capitulative if it’s not maintained. The last half-hour’s recovery back into the noon hour’s range all but erased that capitulation’s effects

That said, the late bounce was probably only a temporary corrective bounce. Its 2088.25 peak was calculated from a correction of the afternoon’s 10-point drop to 2079.50. Holding it to the tick — twice, recovering it after a 3-point interim dip — is the best confirmation available until the next open.

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

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