Market Wrap

Wednesday morning’s sellers didn’t push down hard enough early enough, or hold down long enough, to reverse the intraday trend. They did absorb the probes above 1904.75, but didn’t react down under 1902.00 in time to require an intraday probe under Tuesday’s lows. Then despite extending that reaction to test the 1892.00 and 1886.00 afternoon bias parameters, both had been recovered as the bias environment began.

Sellers gained no traction for the energy they expended. The minimum consequence was to retest the selling’s origin, i.e. the morning’s highs that were testing 1904.75. The range for noise above it at 1909.75 was likely to be included. The target was fulfilled. Still overlapping it at the close prevented putting into play the next higher target, or signaling that its test had held.

Extending higher anyway would next target 1915.00 with room for noise up to 1921.25. Rallying any higher would undermine Wednesday’s rally from being retraced anytime soon — soon enough for its retest to hold and potentially launch a more durable rally. Meanwhile, having trended up into Wednesday’s close, gapping down Thursday under the afternoon’s 1893.00 low could form a “session-long decline.”

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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NOTE: I WILL BE TESTING WEBEX SOFTWARE INTERMITTENTLY, SO RE-TRY IF UNAVAILABLE.

Tuesday’s late bounce from the 1861.50 low extended up to the 1877.00 bias environment exit. That’s natural resistance and there’s nothing unnatural about testing it before resuming the decline.

Of course, extending the late rally makes it easier to recover higher levels that would delay rewarding Tuesday’s sellers for gaining traction. The burden of that proof is on buyers. Meanwhile, the late bounce essentially expended all possible buying pressure during a window when it could not gain traction for the effort. That’s the stuff of weak hands, like the impatient buyers that caused the afternoon’s drop to stop optimistically short of touching the overnight low 2 ticks lower. And that’s bearish from a contrarian perspective.

Rewarding Tuesday’s sellers can begin overnight, within limitations. Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/htpbzcz

This evening, monitor overnight Globex trading in the chaRTroom at:
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[View the Bias parameters here]

That’s more like it. Monday wasn’t actually a “session-long decline” setup. Nevertheless, the session trended down throughout, with each timing window probing under its prior timing window’s low.

Had it been an actual session-long decline setup, then the following session would be likely to extend lower. But only Monday afternoon’s bias environment was actually exited under its prior timing window’s low, so sellers didn’t gain traction.

That may only reflect how uncommitted sellers still are. Bouncing here and there at this stage seems like rearranging deck chairs on the Titanic. Monday’s relentless decline still controlled its sentiment, and certainly didn’t reflect the sort of capitulation that might allow a bottoming process to begin.

Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/kfyfvzb

This evening, monitor overnight Globex trading in the chaRTroom at:
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[Quick links to the post-market Wrap recording.
and to Monday’s morning bias parameters.]

I should think the title says it all. I wish. But, no, I was absolutely looking for the typical Friday ranging to resolve in a typical Friday afternoon rally into the close. And I was caught flat-footed. The session’s gap up had not been rejected, the overnight high had not been retested, and the afternoon’s bias-up had triggered. What’s down?

The bias environment had not improved since moments before triggering bias-up at 1:20. Had the bias environment lapsed still without improving, then I would have placed a short-entry. Had the bias environment’s lapsing only come within view 10-15 minutes out. Had the selling only waited.

Instead, the plunge began with half the bias environment remaining. And I do mean plunge. Price wasn’t gradually drip-drip-dripping lower, finally breaking the dike. That torture would have been merciful for at least offering clues. No, the first downticks were among the deepest.  At least that unseemliness prompted me to tell the chaRTroom the drop had better stop and recover abruptly to maintain potential for fresh session highs. That potential was never to be seen again.

Dropping 27 points in one hour isn’t too shabby, for not having even hinted at its vulnerability. No hint, not beyond it being a Friday afternoon. Perhaps the week’s most unpredictable timing window is becoming more predictable. Recall how last Friday’s expiration fulfilled its bullish bias, by absorbing dips. And the moment the anxiousness of weekend exposure had subsided, Sunday night rallied sharply and extended even higher through Monday morning.

Rallying out of this weekend would be similar to the prior Friday’s head-fake bullishness. Anxiousness ahead of weekend illiquidity is pessimism, which is often bullish from a contrarian perspective. Often, but not always. Pessimism is like paranoia, and sometimes they really are following you starting the next crash leg.

Details and other markets coverage are discussed in the post-market Wrap recording, which is extended to include a bigger picture review, here:
https://roddavid10.mitel-nhwc.com/join/htpbwfy

REMINDER: THERE IS NO SATURDAY REVIEW THIS WEEKEND.

[Click here for the Morning Bias]
Thursday afternoon’s buyers gained traction for their efforts, and their reward should be to spend the next morning trending higher. Sometimes that’s delayed. But Thursday afternoon’s recovery retraced far enough into the prior two sessions’ range at 1924.50 — and without reacting down to close back under the range’s 1918.00 lower-end — that Thursday afternoon’s recovery should extend higher Friday morning.

Actually closing above 1924.50 would have been optimal. Having trended up into Thursday’s close, gapping down Friday under its 1902.00 bias environment low would instead trigger a session-long decline. Being a Friday, the morning’s bias tends to persist well through the noon hour, in whichever direction.

Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/vsxzpkt

This evening, monitor overnight Globex trading in the chaRTroom at:
 XP-Friendly   ||   non-xp ilinc