Market Wrap

Thursday’s open was the first in several sessions not to be greeted optimistically. Probing fresh lows overnight down to 2476.50 had recovered to form the basis of an Isolation setup. Bouncing to 2418.00 came too early to attract necessary reinforcements, and the setup failed. Its resolution was as bearish as it would have been bullish, trending down sharply to 2441.00 before the afternoon bias environment began lapsing. Its reaction up to 2490.00 held prior resistance, chopping wildly back down to 2456.00 through the close.

Thursday’s lack of excessive or ineffectual optimism included rejecting one or two potentially bullish opening setups. All of which suggests that the decline is nearing a capitulative or exhaustive phase, just in time for Friday afternoon’s bearish WedEX influence. But I would still watch for bounces as the holiday illiquidity gets exponentially closer — Thursday met and held decline’s next major target at 2453.25, which could be leveraged for a counter-trend rally.

Regardless, 2453.25, like the decline’s prior objectives, didn’t close above a prior relevant level (e.g. 2500.00) that could have started sealing a bottom. Anyway, trend lows don’t coincide historically with expirations. None of which precludes bounces, but nothing durable is likely near-term.

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

Gapping up Wednesday above Tuesday’s 2562.50 late surge peak could have isolated the interim test of 2530.00. The overnight high probed it, so it wasn’t for lack of opportunity that the open was lower.

None of which precluded a morning rally, anyway. But as noted during the Market Tour, its origin wouldn’t be a position of strength — not a strong base to greet the afternoon’s FOMC events, and likely to fail.

A knee-jerk reaction up on the hike news touched 2592.00, still within the 2595.50 corrective bounce limit. Its reaction plunged, testing 2530.00 for its first time intraday, on the way down to and through 2500.00. Bouncing from 2489.50. Simultaneously oversold 1-min and 3-min RSIs will require an eventual retest. The actively bearish WedEX signal will be of interest Thursday afternoon.

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

Differences aside, Monday and Tuesday’s similarities include both a large optimistic presence, and an a large slide through the afternoon. Monday’s optimism was the rally that followed its opening plunge, but Tuesday’s optimism was the three shallower rallies that each retraced to unchanged. Declining through the afternoon was much more persistent Monday, extending through the position-squaring window. Tuesday’s afternoon drop ended with the final hour.

Notice how time shifted forward on Tuesday. That has some interesting effects.

Monday’s late low is what enabled the Tuesday’s overnight and intraday optimism. But Tuesday’s late bounce has already used its optimism, recovering 31 points of the 45-point point slide. In fact, already exploiting that optimism is what enabled a 26-point slide through the close.

What typically comes next after timing window behavior shifting forward? Legs accelerating their trends. Tuesday’s low fulfilled its objective of probing under Monday’s low, attacking the outstanding 2530.00 target to within 1 point. That’s close enough not to become “unfinished business,” but only if Wednesday’s open is greeted at Tuesday’s late 2562.50 high and higher. The trend otherwise remains down, and vulnerable to accelerating.

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

Saturday Review had updated the bigger picture decline, and Friday’s effect on resuming it this week. Sunday night was a bit deceptive, bouncing 13 points to attack 2617.00 before Europe’s opens. Breaking lower to greet Monday’s open down 11 points at 2593.00 became even more explicit by plunging post-open to 2571.00.

Bouncing back up to 2606.00 probed back into Friday’s range and into positive territory. But stopping ticks short and minutes late of rejecting the morning’s drop made the entire bounce a refueling of sellers. Their reward for fresh lows was fulfilled coming out of the noon hour, and their likely target at 2555.00 was met going into the final hour.

Such a big bounce during the morning, and potential recovery, only to retrace entirely. Such a slow descent as fresh lows relentlessly dipped lower and lower. Excessive optimism above, ineffectual optimism below. Both being bearish from a contrarian perspective.

Another corrective bounce could test 2595.50 without suggesting momentum is met down to 2533.50, while 2530.00 remains outstanding, probably on the way down to testing 2500.00.

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