Market Wrap

Monday’s 2534.00 open was testing Friday’s 2531.00-2533.00 close. So, essentially flat. More important was the open’s test of the 2532.00 earlier Globex low. Not holding above it, after having probed above Friday’s high, would form a Globex-flip setup and reverse down.

The open’s Globex-flip setup was challenged by Friday’s session-long rally setup, which already made Monday morning likely to probe higher. The reversal attempt did fail, becoming as bullish as it would have been bearish. The rally resumed and trended up through the noon hour’s exit.

It wouldn’t be especially interesting that the overnight sellers formed a reversal setup, except that the afternoon’s sellers did, too. Attacking the afternoon’s 2569.25 bias-up target to within 2 points was reversed down into the final hour. Still overlapping the afternoon’s 2550.50 bias-down signal — instead of already breaking under it — keeps alive the 2569.25 target. But exiting the bias environment under the noon hour’s low, and entering the final hour lower, means sellers gained traction and created a position of weakness.

Closing back within the 2548.00-2555.00 range avoided putting into play the next higher target at 2606.00. That’s another effort by sellers, although they failed to close under 2548.00. The afternoon’s position of weakness can still launch a test of the 2569.25 target, but the target’s test is now likelier to hold, assuming it is tested.

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

Each timing window of Friday’s session-long rally probed its prior timing window’s high. The usual noon hour exception probed fresh highs, but the afternoon bias environment did not. Which made the final hour likely to probe at least the afternoon bias environment’s high.

But the final hour did not probe fresh highs. Momentum had died out, exiting the bias environment within the noon hour’s range, and entering the final hour within the bias environment’s range. Successful session-long signals tend to extend through the following morning. Similarly, the missing window tends to be fulfilled the following morning, aggressively to compensate for the delay. The burden of proof is definitely on sellers.

Having closed above 2525.25, the next higher objective in-play is 2548.00-2555.00. Closing any higher would then target 2606.00, all within the context of being a temporary bear market rally.

Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US AT 9:30 ET FOR THIS WEEKEND’S SATURDAY REVIEW.

The new year’s second session began with a second gap down, after probing the intraday lows overnight. Tuesday night’s 2452.00 low was lower, but it was probed Thursday morning. There was a second recovery back above “higher prior lows,” which was maintained Wednesday, but Thursday’s resistance held as resistance.

Of course, buying pressure was pretty well expended. The resistance of Thursday’s higher prior lows was tested by a 42-point rally from the 2447.00 morning low up to 2489.00. Which was retraced almost entirely to attack 2448.00 during the final hour.

There the market sat through the close, paralyzed by anxiousness ahead of Friday morning’s Employment Situation report, more so than by Capitol Hill theater. Stopping optimistically short of touching or piercing the morning’s low suggests at least an overnight dip is likely. But a bullish resolution all but requires greeting the open already rallying to and/or through Thursday afternoon’s ~2474.00 high.

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

Tuesday night’s open spiked up and surged to attack Monday’s intraday high up to 2521.25. Overnight action plunged under Friday-Monday’s range down to 2452.25. But greeting the open at 2468.00 was extended to 2520.50 through the afternoon bias environment, was quite different from the overnight texture, and stopped short of reinstating the bear market rally.

Ultimately, none of Wednesday’s competing influences won the day:

• The overnight slide didn’t exploit its open under prior lows, which would not have required filling the gap back up to Monday’s close, inhibiting further decline.
• The open delayed recovering back into Friday-Monday’s range to avoid forming a bullish Isolation setup.
• The intraday recovery filled the gap back up to Monday’s ~2505.50 close and tested ~2510.00 intraday highs, neutralizing their attractions above.
• Monday’s ~2510.00 intraday highs weren’t finally recovered before coming within 3 minutes of the cash session close, which would have signaled a new rally leg underway (making 2525.25‘s signal only a formality).

Ultimately, Wednesday’s session wasn’t predictive either way. Which is yet another version of Sunday night and Monday’s sessions, now all three lacking predictive value and directional resolution. Fresh highs would still be attracted to 2525.25 (Wednesday afternoon’s 2521.25 bias-up target remains outstanding). Probing instead under Wednesday afternoon’s 2495.00 lows could evolve into a deeper decline.

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

Sunday night’s gap up to 2505.50 had already suggested buyers weren’t strong-handed, because it had held a 61.8% retracement back to Friday’s late high. Firming overnight up to 2512.50 held within the range for noise to suggest nothing different. And Monday’s open overlapped the morning’s 2504.50 bias-up target through the first 3 15-minute checkpoints to suggest that trending wasn’t likely.

None of which prevented dropping down to 2482.75, not even the triggered 2495.50 bias-up signal. It’s not trending, if it’s contained entirely within a prior leg — in this case, Friday afternoon’s last downleg. The drop was retraced to within 2 ticks of the open’s 2510.00 high, still being only noise within the range, albeit a sizeable range.

That bounce failed, too, retesting the already-filled gap back to Friday’s close at 2487.00. But the balance of the session only bounced choppily back to Sunday night and Monday’s 2505.05 opens, still reflecting weak-handed sponsorship… Until the final minutes, which dipped to 2488.00 and snapped back up to 2513.00, still ending the day at Sunday night and Monday’s opens.

Details and other markets coverage are discussed in the post-market Wrap recording here.
HAVE A SAFE AND HAPPY NEW YEAR’S! CHARTROOM WILL RE-OPEN AT 6:00 ET.