Market Wrap

Even after satisfying potential to 1985.00 and hovering there through Wednesday’s cash session close, a post-close surge touched 1989.00. I had cautioned much earlier not to underestimate the upside momentum. The rally has been sponsored by position jockeying ahead of Friday’s expiration. Excessive optimism just wasn’t a concern. Mechanics will always win out over sentiment.

Sometimes mechanics can become extended, too. Closing AT 1985.00 instead of above it, or below it without yet satisfying it, doesn’t require extending higher. And Wednesday afternoon’s buyers didn’t gain traction to earn the same reward that Wednesday owed to Tuesday afternoon’s buyers.

Meanwhile, having triggered a bullish WedEX, the rally could afford to rest on its laurels and allow a pullback Thursday morning. It’s the last opportunity for unsponsored price action, ahead of the afternoon’s FOMC events.  Extending higher anyway or eventually would next target 1996.00 and potentially 2020.00.

Details (yes, there’s still details) and other markets coverage (yes, there’s other markets) were discussed during the post-market Wrap here:
https://roddavid10.mitel-nhwc.com/join/yptkjpk

This evening, use these links to monitor overnight Globex trading:
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Tuesday’s buyers gained traction for their efforts — the bias environment was exited at 2:30 above the noon hour’s range, and the final hour was entered above the bias environment’s range. That tends to be rewarded by trending higher through the following morning.

That said, that’s not how a similar template was rewarded last Tuesday. Its afternoon bias environment was exited above its bias-up target despite being a no-bias environment. which is what happened this Tuesday morning. Last week’s situation might have been exacerbated by trending up already overnight. Similar action in this setup would target 1977.00 and 1985.00.

Backing-and-filling overnight down to 1964.00 would still be likely to resolve up Wednesday. And if not recovering into a morning rally, then an afternoon rally would be likely, still targeting 1977.00 and 1985.00. Looming ahead is the WedEX indicator and Thursday’s impending FOMC statement. Details and other markets coverage were discussed during the post-market Tour recorded here:
https://roddavid10.mitel-nhwc.com/join/xmmsmmj

After 6:30pm ET, use these links to monitor overnight Globex trading:
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Monday’s session similar to the prior several sessions, just in reverse, and in slow-motion.

Rather than test prior lows and then rally, Sunday night’s rally resolved into Monday’s testing of prior lows. And while testing prior lows eventually produced bounces, they were too gradual to accumulate momentum, which prevented an afternoon rally.

Rallying was also inhibited by thin participation during Rosh Hashanah worship services. That’s still a factor Tuesday morning, but much less so by the afternoon. Patience will be wearing thin with quarterly expiration just three days away, and the FOMC policy statement one day before that.

Details and other markets coverage were discussed during the post-market Wrap recorded here:
https://roddavid10.mitel-nhwc.com/join/pcrzmzx

After 6:30pm ET, use these links to monitor overnight Globex trading:
 XP-Friendly   ||   non-xp ilinc

Friday’s pre-market Tour’s premises held true throughout the day. Unfortunately.

First, pre-open and post-open selling pressure under 1929.00 didn’t extend down or gain traction. And the balance of the session didn’t trend, but did range back to Thursday afternoon’s highs around 1950.00. The ranging was a little more trending-like than seemed possible for the session. Trending or not, that didn’t matter since the range was so wide.

The unfortunate part is that by not trending, Friday’s pattern leaves no required objective outstanding. More so, Friday was an inside day, its range contained entirely within Thursday’s range. That upward bias within an inside day would have been bearish if not for being a Friday. Meanwhile, the bias environment exit and final hour entry both were within the noon hour’s range, so buyers gained no traction from the last-minute surge to fresh session highs.

We’ll discuss the bigger picture consequences and challenges during this weekend’s Saturday Review. I’ll send login info in the morning. Meanwhile, Friday’s details and other markets coverage were recorded here.

Foreclosing upon further upside didn’t default to resuming the decline. So, that wasn’t the decline resuming? Breaking 16 points in an hour from — 1949.00 down to 1939.00 — certainly seems like a decline. Of course, it is a decline, but it didn’t necessarily resume the decline.

In fact, both 1-minute and 3-minute RSIs teased at oversold without breaking it. That’s not selling pressure, that’s prices falling of their own weight. And that’s different from resuming the decline.

Neither buyers nor sellers gained traction for their efforts, so there is no requirement for Friday to reward either. The last two Fridays ranged relatively narrowly after their opens. There’s room for ranging a couple dozen points above and below Thursday’s close, which will take a lot to resume the decline or to attempt another recovery.

Details and other markets coverage were discussed during the post-market Wrap, click here.

Following are chaRTroom links to monitor the overnight Globex session:
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