Market Wrap

Thursday afternoon’s bias environment exit was slightly above the noon hour’s high. The 3:10-3:20 window firmed its way to fresh afternoon highs. Neither was decisive, and combining them doesn’t greatly enhance the whether the rally gained traction for Thursday’s efforts.

Regardless, any reward the effort earned hasn’t yet been awarded. The last half-hour reacted down from 2090.50 to 2087.00. But that has been recovered to a fresh high at 2091.00.

The ongoing narrow range that began after Wednesday morning’s surge doesn’t require resolving either way Friday. Sponsorship is difficult to generate during thinning participation (as if this week weren’t already lightly attended) ahead of the three-day weekend. Counter-trend sponsorship is difficult to generate, too. So just trying to resolve the range could be enough to produce a significant move, or a rubber band effect.

There’s a catalyst for that. Fed Chair Yellen is scheduled to speak Friday during the afternoon bias environment. one hour after Friday’s open. She may reinforce trending underway already in anticipation of her remarks, or prove they were overly-discounted and trigger a reversal. With three days of illiquidity just minutes away, any reaction is likely to be very aggressive, if not altogether brief.

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

Monitor overnight Globex trading in the chaRTroom here.

Wednesday morning’s overbought RSIs at 2092.00 had required its retest. The afternoon’s extremely narrow 2-1/2 point range resolved up just enough to touch 2092.00. But that only stretched the rubber band to snap back down to fresh afternoon lows.

Plunging to within 1 tick of the noon hour’s 2086.00 low digested the sudden reversal, and then recovered it. Fresh highs were probed up to 2092.50. That also reacted down — considerably, to 2087.50, and only a little less aggressively than plunging.

It’s pretty choppy, but it’s also pretty narrow. Like a very large pebble being cast into a very small pond. But it is a lot chop at the high of a move.

Nevertheless, the afternoon’s 2094.75 unfinished business above outstanding. It requires being retested, too. Wednesday’s second consecutive higher close confirms Tuesday’s breakout, now requiring at least an eventual third higher close.

Having entrenched itself, the rally can afford to hesitate again with another pullback. But not very deep or for much time, as a valid recovery should still be steep.

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

Monitor overnight Globex trading in the chaRTroom here.

Tuesday’s “session-long rally” setup succeeded at producing each of its required elements, i.e. all but one timing window probing its prior timing window’s high. The exception was the afternoon bias environment instead of the more common noon hour. And price didn’t trend up into the close as it often can.

A valid session-long rally is often followed by trending up through the next morning’s bias environment. It’s not required, and fulfilling it can follow an overnight dip. But if sellers haven’t retaken control at Wednesday’s open, then the morning will likely probe fresh highs.

Tuesday’s rally didn’t gain traction for its efforts, which requires Wednesday’s open to gap up if the rally is durable. So, probing fresh highs Wednesday morning without gapping up would be likely to trend back down in the afternoon.

All of the above is discussed in the Wrap. One other point we’ll discuss in the morning is that Tuesday was a breakout session. While a second consecutive higher close would confirm, be aware that the past three weeks have begun with either a Monday or Tuesday surge that immediately failed. C’est la vie!

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

Monitor overnight Globex trading in the chaRTroom here.

Monday’s “inside day” was a miniaturized version of the overnight choppiness. A lot of swings, but essentially unchanged. We caught all of the early clues for a dry cleaners morning — the difficulty in starting from a standing stop, the first hour’s 15-minute checkpoints, no-bias. The dry cleaner’s afternoon simply had to signal no-bias again.

Now the question is whether Monday’s late break resolved the range. Fresh session lows were being probed before coming to within 3 minutes of the cash session close. But only just before, and only by a little. So beware of another narrowly ranging dry cleaners morning Tuesday if  the opening 15 minutes haven’t yet trended.

Meanwhile, an overnight detour down into Thursday’s range is possible, whether to 2039.50 or to 2034.00. Much lower, especially through the open, would not be likely to recover. But even from that low an overnight recovery would be possible, and so would gapping up above Monday’s 2054.00-2056.00 highs.

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

Monitor overnight Globex trading in the chaRTroom here.

WedEX signals tend to be more reserved on Friday afternoons. But, is this a little too reserved?

The bias environment was entered at its 2053.25 high, and then dipped to 2047.50. Its reaction up to 2052.50 was reversed to a lower low at 2045.00. Lower lows and lower highs is what we call a downtrend. Downtrends aren’t commonly associated with “bullish” signals.

Bouncing to 2050.00 into the close did retrace 61.8% back to 2053.25, which is a proxy for it. The pullback held positive territory, above the open, leaving no unfinished business below. It’s not optimal, but it’s also not complete, and a valid recovery must extend higher without delay Monday.

Gapping down would be disqualified. Otherwise, extending higher Monday without delay would keep alive the aggressive half of the bullish WedEX. We’ll discuss that and other influences during this weekend’s Saturday Review.

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