Market Wrap

Retesting Friday’s 1968.75 pre-open high had targeted 1971.00. Its test held initially, but was probed eventually by 7 points up to 1975.75. That’s a good example of thoroughly testing a target. Reacting down probed under 1971.00 by 1 point. That’s the definition of an attractive target.

Surging into the cash session close attacked  the 1975.50 high. Surging into the futures close to touch 1978.50 only reflects a short-squeeze. The original probe above 1971.00 has yet to be exceeded when it matters.

Having trended up into the close, gapping down under the bias environment’s 1966.50 low could form a “session long decline” setup which hasn’t been seen in awhile. And with every leg still overlapping 1971.00, no “unfinished business above” would be left outstanding.

Being vulnerable to reversing down is not a requirement. Not trending back down Wednesday would next target 1993.00, and potentially 2012.00-2014.00.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday afternoon’s decline gained traction for its effort. The bias environment was exited under the noon hour’s low, and the final hour was entered under the bias environment’s low. Tuesday morning should reward sellers with probing lower — and not only momentarily. That reward can be delayed until the afternoon.

None of Friday’s range requires being tested, no matter how much likelier that had become Monday morning. But it was a mistake to give the late-morning rally too much credibility. Not actually a mistake, since it held the bias-up signal’s resistance. But the late-morning rally did not earn any reward.

Negating Monday afternoon’s drop would all but require gapping up Tuesday above Monday afternoon’s 1951.00 bias environment high. Gapping up above the afternoon’s 1943.00 bias environment exit would be a contender.

It’s entirely possible that the retest of Feb 1’s high has completed, and that the trend is reversing down. Momentum shouldn’t delay being obvious, unless any further dipping is only delaying a retest of Friday’s highs.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday afternoon probed fresh session lows, but it didn’t melt down. That’s significant, since that was the vulnerability. Once breaking back under 1952.00-1953.00 and extending down to 1943.00, the next bounce was reversed to 1942.00 into the close. But only grudgingly.

Meanwhile, avoiding a new trend high close on a Friday prevented the rally from further entrenching itself. Closing under 1952.00-1953.00 on the same day it was tested suggests that upside momentum is lapsing. And closing back under Thursday’s prior high prevents putting into play higher targets.

None of which broke under a prior session’s prior low. Monday’s “lower prior highs” were tested throughout Friday’s last 60-90 minutes, but not broken.

There’s still a path to extending higher, or at least to backing-and-filling up within Monday’s range. But now there’s also a path to launching the next downleg. The latter path is the scenario described during last weekend’s Saturday Review, which had anticipated fresh highs. We’ll update that during this weekend’s Saturday Review (login link will be sent overnight).

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

I always take special notice of similar price action that develops during consecutive timing windows. That’s two-thirds of a pattern, so I want to be prepared for it to repeat. Prepared, and positioned.

Sessions are timing windows, too. So it’s interesting that Thursday’s pattern duplicated Wednesday’s recovery in some key ways. Both mornings were under pressure, recovered by surging above prior relative highs, which was rewarded by rallying into the close.

That’s accumulation. Not basing, which would launch a durable upleg. But accumulation that earns the reward of extending higher.

The two setups differed, too. Wednesday’s recovery developed upon exiting the morning’s bias environment, while Thursday’s surge didn’t develop until entering the afternoon’s bias environment. Thursday morning’s dip held above prior lows and fluctuated around unchanged, while Wednesday’s had ventured out onto the precipice.

Another difference is that Thursday afternoon’s rally fulfilled its minimum upside attraction at 1946.00, and extended to within 1-2 points of its potential to 1952.00-1953.00. Wednesday afternoon’s rally was constrained only by available time, and even then extended through the close.

So, extending higher early Friday is likely, that being the likely resolution to the two-day pattern of intraday recoveries. Maintaining early gains is not at all assured, being so near the next higher objective. Reacting down early from testing 1952.00-1953.00 (or even probing above it) could trend down hard into the close. Not reacting down would more likely trend up into the afternoon.

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

Monitor overnight Globex trading in the chaRTroom here.

Haven’t seen a Wreversal Wednesday in awhile. Trending convincingly during the morning before an entirely different picture emerges into the close.

There is no “unfinished business” below. Not recovering above 1898.00 through the open had required trending down even deeper to 1890.00 to satisfy the overwhelming selling pressure. Probing under it continually overlapped it without breaking lower.

The recovery gained traction for its effort, by exiting the bias environment above the noon hour’s high and trending up to fresh highs through the 3:10-3:20 window. Rewarding the recovery’s sponsorship Thursday morning is likely, so long as the open isn’t rejecting the recovery by gapping down too deeply.

Regardless of Thursday morning’s action, Wednesday’s high touched last Wednesday’s 1927.25 high. That was the “pivotal high” prior to Monday’s 1943.75 actual high. Just touching the pivotal high now requires also touching the actual high.

Recall that the drop from Monday’s close was always considered only a temporary correction. The timing of its origin, the high’s overbought RSIs, the high’s opening gap up… Wednesday’s recovery is in-line with this context. So, higher highs remain likely up to 1846.00 and potentially also to 185.00-1853.00.

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

Monitor overnight Globex trading in the chaRTroom here.