Market Wrap

Tuesday’s 2654.00 opening print gapped down 17 points from Friday’s close. The opening 15 minutes of volatility ranged flat-to-lower. Only then did sellers finally do what they’d only threatened since Sunday night’s open — actually touching Friday’s 2649.00 low. The relentless overnight slide didn’t find reinforcements immediately, but they arrived before a bounce could develop, which sufficed.

Meanwhile, opening back under 2656.00 allowed a close under 2656.00 to reject Friday’s close above 2656.00, and the rally’s next higher objective. This doesn’t itself reverse the trend down, so much as it opens the door to a reversal signal. Which is formed by Tuesday’s sudden, steep and substantial reversal from the prior session’s fresh recovery high. It’s not the intraday reversal we’ve been anticipating, but it qualifies.

The reversal still needs to be confirmed by a second consecutive lower close on Wednesday. That could be helped by extending to the next lower target at 2605.00 which was left outstanding by Tuesday’s 2616.50 low. But that’s still 25 points short of a lower low to signal a new downtrend underway. Bouncing first on Wednesday could test 2656.00-2666.00 before suggesting that Tuesday’s drop was only a detour.

Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.

Friday’s gap up to the rally’s next higher objective at 2656.00 took the entire bias timing window through 10:15 to absorb a dip to 2647.00. But the rally resumed and extended higher through the noon hour to 2677.25. That was 3 ticks short of the afternoon’s bias-up target, and the bias environment only dipped down to 2662.00. The final hour firmed to 2670.50 through the cash session close, and to 2672.50 through the futures close, and then to 2677.75.

The bullish WedEX’s success is gauged by a comparison to the bias environment’s high. Which the cash session close barely attacked and the futures close barely touched. The post-close fresh session high tilts the scale, so that we should at least be aware of Tuesday morning’s potential for trending up aggressively from the open.

Closing above 2656.00 has put into play the rally’s next higher objective at 2701.00. Closing firmly above its room for noise at 2668.50 would have expected the rally to extend higher aggressively and without delay. Only overlapping it at Friday’s close leaves the door open to rejecting the close above 2656.00 by immediately reversing back under it.

Details and other markets coverage are discussed in the post-market Wrap recording here.
REMINDER: NO SATURDAY REVIEW THIS WEEKEND DUE TO THE HOLIDAY.

Thursday’s 2606.00 open was a 9-10 point improvement from the overnight low, which had held a test of ~2598.00 “lower prior highs.” Post-open action immediately resumed the overnight recovery, with a complete recovery to 2626.00 being the reward for having held the lower prior highs. Attacking it coming out of the noon hour helped to trigger the afternoon’s bias-up.

No sooner had the 2630.75 bias-up target become unfinished business, when a China trade headline triggered a surge to 2645.50. Its correction was hurried by an explicit denial of the original news. Reacting down 20 points was still recovered to close at 2635.00-2636.00.

Tuesday’s confirmed breakout had required an eventual third higher close, which is now neutralized. Not without creating new upside attractions. Simultaneously overbought 1-minute and 3-minute RSIs at the high require a retest. And closing above 2626.00 puts into play the rally’s next higher objective at 2656.00, which can be invalidated by exiting Friday’s open back under 2626.00. Overbought RSIs can be neutralized overnight, and the higher objective can be invalidated at the open, without interfering with WedEX’s bullish influence.

Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.

Wednesday’s 2614.75 gap up was just above Tuesday’s high and quickly extended another 9 points. Price only ranged choppily sideways into the afternoon’s bias environment, which triggered noN-bias. Not a lot of upside sponsorship, but no meaningful downside sponsorship. Nothing to prevent fresh highs from neutralizing the afternoon’s 2626.75 bias-up target to within 3 ticks.

That fresh high behaved as if it were fulfilling buying pressure, as the last 60-90 minutes trended back down to 2615.25 into the cash session close. Futures extended down to 2612.50.

Futures settled 1-2 points back under Tuesday’s high. Dipping that deeply any earlier wouldn’t have confirmed Tuesday’s breakout session, which now requires an eventual third higher close —  an eventual third higher close that would presumably be above 2626.00, and put into play the rally’s next higher objective at 2656.00.

None of which requires extending the rally without delay. Touching 2626.00 without closing above it reflects some weakness in the breakout’s sponsorship. And Wednesday’s final hour rejected the opportunity to signal buyers were gaining traction. A temporary detour down Thursday isn’t required, but it wouldn’t be surprising.

Meanwhile, the confirmed breakout also qualifies as a bullish WedEX. Its influence applies to Friday afternoon (and Monday morning), and doesn’t prevent a temporary detour down on Thursday. Gapping down Thursday under the ~2598.00 prior highs would be difficult and unusual, so it would be unlikely, but it would serve by proxy to invert the WedEX.

Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.

Prior highs were finally probed on Tuesday. Not only by the unimpressive 3-tick fresh high at 2600.25 overnight. And not just its impressive intraday retest after having been retraced back down to 2580.25 before Tuesday’s open. Prior highs were probed intraday up to almost 2614.00. And another 20-point dip to 2594.00 was recovered almost entirely to within 2 points of 2614.00.

The rally’s 2606.00 calculable objective is met. Still overlapping it during the 3:37-3:52 position-squaring window negates any predictive value from closing above it. Rather than requiring a test of its room for noise up to 2626.00 or putting into play 2656.00, there only remains room for noise up to 2626.00.

Meanwhile, having met 2606.00, the pattern’s vulnerability to a collapse is at its greatest. And already starting to trend down overnight would be valid. Not yet reversing down by Wednesday afternoon would start making the rally’s next higher objective at 2656.00 likelier.

Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.