Market Wrap

False alarm, or false start?

My prior blog post had described many of the reasons why the rally is vulnerable to reversing down. A 5-stage pattern had been plateauing up to 2047.50, awaiting a 5th stage targeting at least 2042.75 and potentially 2037.75. The final hour began by dropping quickly to attack 2037.75. The balance of the session ranged sideways.

Was that just the beginning of a much deeper drop yet to come, its sponsorship inhibited by the fast-approaching close? Or was that all there is? It could be either — no unfinished business is outstanding, and neither sponsorship gained traction.

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

Monitor overnight Globex trading in the chaRTroom here.

Retesting the 2044.25 overnight high Monday afternoon created an “outside day.” Haven’t seen that in awhile. It’s otherwise meaningless, except to make remarkable an otherwise unremarkable range.

Actually, more could be said for Monday, which produced a new trend high close. That fulfills the minimum requirement established by Friday’s new trend high close — that there be an eventual higher close. Fulfilling it so quickly is a little useless, since it neutralized the setup’s predictive value.

Actually, the neutralized upside attraction now updates the reversal template with one less impediment. A reversal isn’t required, and it can be overcome, but two consecutive days of unremarkable (mostly unremarkable) does suggest the rally’s momentum may be lapsing.

Actually, it may be only the recent expiration sponsorship that is lapsing. The rally can resume by gapping up Tuesday, since Monday afternoon’s buyers gained no traction for their efforts. Or, an immediately break lower could find buyers at a lower level to sponsor the next rally leg.

Multiple sessions of relatively narrow ranging tend not to resolve immediately. In other words, trending tends to follow a false break in the opposite direction. So, reversing down would more likely begin by failing an aggressive probe of fresh highs, first.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday afternoon’s drop was recovered entirely, and literally — from the noon hour’s 2040.00 exit down to a test of the afternoon’s 2033.50 bias-down signal, and back up again. even the noon hour’s 2041.75 high was touched.

No higher highs were required since the bias environment wasn’t exited above all prior timing windows. Even considering the bullish WedEX, and even considering that the bullish WedEX had been productive. So the balance of the session ranged narrowly around 2040.00 — expiration dipping to 2036.50 is irrelevant for our purpsoses.

The new trend high close fulfills the third higher close that was by confirming Wednesday’s breakout. The new trend high close on a Friday now deserves a similar reward, that at least one more higher close develop before a durable decline could begin. An immediate pullback, possibly, but not a durable reversal down.

Meanwhile, the bullish WedEX’s influence on Monday should be aggressive. Its influence proved out Friday afternoon, so even if Monday’s open were to gap down considerably, the morning should rally. Rallying to fresh highs without gapping up would be vulnerable to reversing down, since buyers didn’t gain traction for their efforts — and since some older “higher prior lows” are being probed that should get to slow the advance.

REMINDER: THERE IS NO SATURDAY REVIEW THIS WEEKEND.
Also, chaRTroom will be available after Sunday night’s Globex open. Not very long after, and you’ll receive the usual Email Alert with its URL.

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

Thursday’s rally contradicted the lack of traction gained by Wednesday’s buyers. It doesn’t change whether they gained traction — the overnight slide was appropriate.  But fresh highs produced before the last hour would normally fail. That’s not unfinished business below — it is a reflection of underlying strength.

Thursday’s second consecutive higher close following Wednesday’s breakout from a multi-session range is also a reflection of strength. The confirmation now requires an eventual third higher close. Not necessarily on Friday, but a new trend high close on Friday would entrench the uptrend by creating a new requirement for another eventual new high close. The bullish WedEX stands ready to assist, so long as the morning isn’t too weak to climb all the way out of.

Unfinished business below at 2027.00-2028.50 must still neutralize Thursday afternoon’s “no-bias trending.” Unfinished business above at the 2036.75 high’s overbought RSIs must be neutralized, too. Stopping pessimistically short of the latter late Thursday suggests it will be exceeded more substantially, presumably after neutralizing the former.

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

Monitor overnight Globex trading in the chaRTroom here.

WedEX triggered actively bullish thanks to a single session, not two, which leaves it vulnerable to rejection at Thursday’s open. Gapping down under 2006.00 would suggest that Wednesday’s new high close was an anomaly.

Not gapping down would avoid invaliding the bullish WedEX, but a second consecutive higher close would help to confirm it. It would also confirm Wednesday’s breakout, the first fresh high close from a multi-session range.

Gapping up would be more helpful, yet, since Wednesday afternoon’s buyers didn’t gain traction for their efforts. So, gapping up is the only credible path to immediately extending the rally.

Each of the setups is vulnerable to non-confirmation, invalidation or inversion. But that’s probably not too much of a risk if Wednesday’s rally is maintained through Thursday’s open.

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

Monitor overnight Globex trading in the chaRTroom here.