Market Wrap

It’s not necessarily surprising that Tuesday’s weakness didn’t extend to last Thursday’s “lower prior highs” around 2048.00. Tuesday’s lows weren’t far below its 2053.00-2053.50 bias parameters, momentarily attacking 2051.00 coming out of the noon hour. But absent an overnight rally, don’t be surprised if 2048.00 is being tested instead.

Meanwhile, Tuesday’s last-hour rally performed above and beyond expectations. It was actually pretty easy, since there really weren’t any expectations. No accumulation below, no attraction above, no traction exiting the bias environment. But the 2056.50 buy signal was probed up to 2064.50 through the futures close.

AAPL’s earnings is all about AAPL now. The broader market can turn its attention to Wednesday afternoon’s FOMC policy statement and clues in the language accompanying it.

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Monday was a second consecutive non-trending session. But it didn’t start by gapping up like Friday, and it didn’t gap down, so we know that buying pressure isn’t expended. Anyway, higher objectives remain outstanding — from a third higher close, to the rally’s 2088.00 objective.

None of which prevents probing lower Tuesday, whether by trending or by gapping down. In fact, Monday morning left outstanding “unfinished business below” at its  2058.50 bias-down target. But it was an inside day, as was the overnight action, so gapping open in either direction Tuesday would be likely to extend.

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Closing above 2055.00 has now put into play 2088.00. Friday afternoon’s buyers gained traction by exiting the bias environment above the noon hour’s high, and by entering the final hour higher. And Thursday’s breakout above the multi-session trading range has now been confirmed by a second consecutive higher close – at least an eventual third higher close is required. None of which prevents an immediate pullback. They almost invite a pullback, to refuel the rally whose upside resolution is entrenched. Of course, gapping down enough could reject Friday’s gains altogether…

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REMINDER: Saturday Review starts at 9:30am ET. I’ll send links in the morning.

Topics that I intended to cover in this post-close note included the unfinished business above at the 2048.75 high’s overbought RSIs. But that was neutralized by extending past the 2046.00 cash session close to fresh session highs. So, scratch that…

Another topic I wanted to cover is the next higher objective above 2019.50. More than a week of ranging around it and overlapping it — even labeling Wednesday’s plunge as just testing the range’s lower-end — had prevented putting into play the next higher objective at 2055.00. But post-close action just met it. Soooo, scratch that one…

We should remember the recent range’s characteristic of surging, and then reversing down sharply as soon as the surge has peaked. Has this surge peaked? Simultaneously oversold 1-minute and 3-minute RSIs at Thursday afternoon’s 2034.50 low… wait, let me check… still requires an eventual retest.

Often, the session-long rally/decline setups extend the following morning. Since Thursday afternoon’s buyers didn’t gain traction for their efforts, probing higher without gapping up would be vulnerable to reversing down sharply. Otherwise, overcoming those challenges and closing above 2055.00 would next target 2088.00.

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This evening, monitor overnight Globex trading in the chaRTroom at:
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Did Wednesday form a trend change setup? It may have begun one. It’s a long way down to last week’s 1982.50 lows before sealing a top. But rallying to a fresh high close above 2026.50 is easier, and that would raise the trend change signal considerably.

Actually, rallying to a fresh high close is nearer. It’s 15-18 points away from Wednesday’s 2008.50 / 2011.50 close, and 26-29 points from last week’s lows. But rallying to a fresh high close is made more difficult by having just ended an intraday 20-23 point slide.

Fun fact: Wednesday’s close is essentially a Fibonacci 38.2% retracement between the two. It’s natural support, so maybe an immediate recovery isn’t actually more difficult.The 61.8% retracement is 1999.25. Its test is likely if not already rallying at Thursday’s open.

Details and other markets coverage are discussed in the post-market Wrap recording here:
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This evening, monitor overnight Globex trading in the chaRTroom at:
non-xp ilinc