Market Wrap

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The no-bias environment’s rally came within 1 point of its 1988.75 target before gravity sneaked in. I never found sellers credible for retaking control since the drop had originated so late. But it did bottom upon retracing both the 1981.00 bias-up signal and the 1977.50 print. And eventually rallying after the position-squaring window did meet the 1988.75 target.

Buyers gained no traction, as exiting the bias environment above the noon hour’s range didn’t extend up into the final hour’s entry. So, resuming the rally Thursday will require gapping up. Extending higher anyway would be doomed to failure. Wednesday had a similar condition, and did gap up — that didn’t prevent an intraday dive but the dive did recover.

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 the ilinc platform only this week:
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But for the morning’s momentary probe above Monday’s 1980.00 high, Tuesday was an “inside day,” contained entirely within Monday’s range. It might have seemed more substantial, being under pressure the entire day. But recall that was the expectation for the day before it even began. The rally need not resume without delay. And it won’t resume soon if Wednesday’s open is already trending down. Otherwise, the recovery is vulnerable again to resuming Wednesday. Check back for the morning’s First Trade blog post.

So, Friday’s recovery was not an anomaly. It was extended Sunday night and throughout Monday. It’s also not a novelty, since it didn’t launch from trend lows but from a pullback. Vulnerability to a corrective pullback increases when buyers don’t gain traction for their efforts, as with Monday afternoon. Gapping up would signal instead that the rally had attracted new sponsorship without need of a correction.

Assuming no gap down, the rally has now retraced into the orbit of last month’s FOMC announcement. Overbought RSIs at its 2011.75 high are an attraction. A pullback first could be triggered under 1972.00 and have room down to 1956.00. So long as 1960.00 holds through the close, the trend remains up.

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:
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Setups reflect sponsorship taking control. If they’ve done everything necessary, and still don’t succeed, that’s not a failure — it’s the opposing sponsorship taking control instead.

Exiting Friday morning’s bias environment 20 points off its 1883.00 low wasn’t itself the reason for the “session-long decline” failing. And it was no reason why its inversion couldn’t still be productive. The inverted setup could have only ranged flat-to-higher, but it doubled the initial 20-point recovery, and then added another 20 points on top.

And there’s room for yet another 20 points, but no requirement, since the next higher corrective bounce potential was met and held at 1942.00. Not already retesting Tuesday’s low has affected the corrective bounce’s consequences. Some details and other markets coverage are discussed in the post-market Wrap recording here:
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Join us in the Saturday Review for more discussion of the corrective bounce, the “session-long” setup, and possible Sunday night and Monday morning price action. It begins at 9:30am ET, and I’ll send access instructions before then.

Thursday afternoon’s recovery ended at the morning’s 1915.00 bias-up target. The rally greeting Thursday’s open — as with the rally that greeted Wednesday’s open — was corrected intraday and then recovered into the close.  The patterns differ in several key ways, like developing exclusively in positive territory or not. But they can’t be confused with greeting Friday’s payrolls report pessimistically.

The question is whether the Employment Situation report is being greeted from a position of strength, or overly-optimistic. How about, a happy medium, almost equilibrium. The market wants to react favorably to the news, but will have difficulty maintaining that bullishness much past Friday’s open.

Upside potential includes retesting Wednesday night’s 1929.50 high, 1942.00 and 1960.00. None of which is an actual attraction. Downside attractions begin at Thursday afternoon’s 1897.00 bias-down signal. Probing above it during a bias-down environment requires its eventual retest. A small reach, but opening it could reveal a bigger hole below.

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:
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