Market Wrap

The decline from 2059.50 touched 2048.75 as Thursday’s bias environment was being exited under the noon hour’s low. But the final hour’s entry was still overlapping the bias environment’s 2050.50 low. So, sellers gained no traction for the substantial effort.

At least they prevented closing above 2056.00, despite having probed above it for a second consecutive day. But the close was also maintained above its 2051.00 counterpart, a small victory for buyers.

Without gaining traction, trending Friday must begin by gapping beyond a prior relevant high or low. Lacking the basis for a “session-long” decline or rally setup, trending through the morning would be vulnerable to reversing. The next higher attraction above is 2067.00-2068.00, and below is 2044.50 and 2039.25.

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

Monitor overnight Globex trading in the chaRTroom here.

But for a few ticks, Wednesday’s 2058.00 open was still being overlapped at Wednesday’s close. Exceeding the morning’s 2056.00 bias-up target had renewed the bias-up signal, but its 2061.25 renewed bias-up target had been met already and held. That setup had warned of that morning trending attempts would fail.

Not that trending wouldn’t be attempted, but that it would fail. And it was attempted and it did fail. A lot of selling pressure was expended intraday without triggering a bias-down and without leaving positive territory. That already produced an afternoon bounce, and didn’t gain traction for the effort, so extending higher Thursday largely relies on already extending higher overnight.

There having been no net post-open improvement Wednesday, and Thursday being the day before March’s Employment Situation report, backing-and-filling wouldn’t be surprising. Already trending higher Thursday would risk discounting bad payrolls Friday, which could only fulfill expectations but not exceed them.

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

Monitor overnight Globex trading in the chaRTroom here.

1-minute and 3-minute RSIs didn’t actually diverge negatively into the 2047.50 high. With the 1-minute, RSI had not been overbought since much earlier and a little lower. As for 3-minute, RSI barely left overbought territory.

All of this developed upon touching last Tuesday’s 2047.50 actual high. Just touching last Monday’s 2044.50 pivotal high had required  testing 2047.50. Already neutralizing the higher attraction tends to undermine the upside momentum.

All of this also developed while trending to fresh session highs through the 3:10-3:20 timing window. Barely. It was a net total of 2 ticks, or 6 ticks from high to low. The timing would complement the bias environment exit to reflect buyers gaining traction. Does 2-6 ticks deserve a benefit of the doubt for rewarding buyers with a Wednesday morning rally?

Extending higher would next target 2051.00 and potentially 2056.25. Nothing requires maintaining a higher high. But Tuesday morning’s probe under support through the opening windows does suggest a retest of its low.

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

Monitor overnight Globex trading in the chaRTroom here.

Being the day before a 3-day holiday weekend, Thursday’s sponsorship was by definition weak-handed. Bouncing during the morning’s bias-down environment was all the more so. Reversing down to the decline’s 2009.00 objective could have ended the pullback.

But the bounce extended. The morning’s bounce had created room to absorb selling pressure, but that room had to be exploited without delay. The afternoon’s extended bounce made the mistake of closing at 2027.00 resistance (cash session close). Counter-intuitively, rather than create extra room to absorb selling, sellers were refueled. Holding 2009.00 is now only more difficult.

That potential for not holding 2009.00 hasn’t been in our discussions previously. Stretching the rubber band so much tighter Thursday has introduced another template seeking bigger objectives than just neutralizing “lower prior highs,” looking instead to fill gaps. The nearest qualifying objective is 1980.00.

What if 2009.00 is not tested next? The gap back down to Thursday’s 2015.00 open should facilitate that. But not already reversing down at Monday’s open could extend the bounce to 2039.00-2041.00 while still being only a temporary correction. Even if sellers weren’t obviously in control at Monday’s open, I would still be skeptical of further upside if Monday’s open wasn’t already obviously extending higher.

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

REMINDER: NO SATURDAY REVIEW ON HOLIDAY WEEKENDS. CHARTROOM WILL RE-OPEN SUNDAY NIGHT.

This being Wednesday before a 3-day holiday weekend, trending already underway is difficult to stop, let alone to reverse, before next week. This suggests that Tuesday and Wednesday’s lows are now resistance.

Thursday’s open always has a role to play by proxy. Gapping up above 2034.50 would be credible for extending back to the range’s upper-end. Otherwise, the drop’s potential objective is back down to 2009.00.

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

Monitor overnight Globex trading in the chaRTroom here.