Market Wrap

Monday’s open had already shrugged off a threatened Globex-flip. Probing above Friday’s 2942.75 high Sunday night to 2946.75 would have been the rubber band stretch, and exiting the open under the 2939.00 Earlier Globex Low would have been the snap back down. But the pre-open test of 2939.00 was recovered before the open, negating the bearish setup.

Triggering the morning’s bias-up signal had left its 2950.50 bias-up target outstanding, but the noon hour neutralized it. Triggering the afternoon’s 2946.75 bias-up signal left its 2954.25 bias-up target outstanding. Attacking it up to 2951.50 didn’t prevent a late-afternoon drop back down to the morning’s 2944.50 bias-up signal as support. And lower through the close to 2941.75.

The session barely closed positive, but it closed positive. Anxiousness ahead of GOOGL’s post-close earnings was probably the culprit behind inhibiting the afternoon’s rally. Well-deserved inhibition, as GOOGL plunged 73 points just minutes after my pre-open update noted Monday’s suspiciously late bounce to 1293.00. That’s now history, and fully discounted by the market.

Tuesday’s econ calendar is very heavy with plenty of reports, and Wednesday’s calendar is very weighty with FOMC events. The quarterly earnings onslaught continues, and this stage continues shaping a different profile than the first round of reports.

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

Friday was almost greeted from within another narrow sideways range resisted by 2926.50. But the knee-jerk reaction to GDP had surged to 2932.00. Then its pre-open retest was reversed back down into the overnight range anyway. That’s the normal consequence of breaking an overnight range within 60-90 minutes of the open.

Sellers were attempting to trend on a Friday morning. They failed, so they became marginalized. Separately, holding tests of both the 2919.50 and 2924.50 bias-down parameters put into play offsetting tests of the 2934.00 and 2940.75 bias-up parameters. They weren’t required because the rejection was late, but their tests were fulfilled anyway.

“Unfinished business” from prior sessions at 2942.00 and 2942.75 was also fulfilled by Friday’s last-minute surge to 2942.75. Surging earlier might have qualified as a new trend high close on a Friday, but this came too late, so new new unfinished business was created.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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Wednesday night’s sideways range barely threatened to reverse up. Its last bounce to 2935.00 had reversed under 2930.75 sell signal and through the 2928.00 opening print, on the way to renewing its bias-down signal and meeting its 2914.25 renewed bias-down target. That took two hours, including the pre-open high. It took 90 minutes to retrace the pre-open high by noon.

That’s a lot of volatility. Buying and selling pressure don’t offset each other, they expend themselves. Similar to Tuesday morning’s surge, although not required, the afternoon ranged narrowly. Perhaps Thursday afternoon’s ranging was due to more pre-earnings anxiousness, with AMZN and INTC reporting post-close.

Thursday afternoon’s range broke lower, but not until coming to within 3 minutes of the cash session close, which got to 2928.00. That extended another 2 points when INTC missed and guided down, reacting down sharply and erasing AMZN’s initial knee-jerk reaction up.

The second half of quarterly earnings is underway, and tends to be different from the first half. Probing fresh highs remains likely, but is getting less likely to be maintained.

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

Apparently, Tuesday morning’s rally sapped the market of a lot of energy. The afternoon ranged narrowly sideways, as did the overnight. The range expanded slightly Wednesday, but not to new highs. Wednesday’s three bullish factors are:

• An entire session without immediately retracing Tuesday morning’s rally helps to suggest the rally will resume. Immediately retracing the rally could have recovered, too, but less often. Meanwhile, a deeper retracement is still possible, but with a greater likelihood of recovering.
• Not even piercing a fresh high, if even touching a high, reflects pessimism. Ineffectual pessimism, for not having reversed down. Pessimism is potentially bullish from a contrarian perspective.
• Both bias-down signals held their tests to avoid triggering, which puts into play offsetting tests of their bias-up signals. In addition to Tuesday’s 2942.75 unfinished business, only Wednesday morning’s 2942.00 remains outstanding, since the afternoon’s 2937.50 bias-up signal was attacked to within 3 ticks by Wednesday’s late-afternoon high.

Perhaps anxiousness ahead of post-close earnings like FB, MSFT and TSLA prevented attracting strong-handed buyers to sponsor another upleg. The same influence could have prevented backing-and-filling deep enough to find strong-handed buyers below. It’s really irrelevant, other than to get the event(s) behind the market so its pattern can play out.

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

Monday night’s 2908.50-2914.00 sideways range tried breaking higher 60-90 minutes before the open. Had the breakout maintained or extended, then it likely would have been false. But it self-corrected pre-open, making almost any renewed buying pressure likelier to extend. Which it did, fulfilling its 2926.50-2928.00 objective before the bias environment began lapsing. And then extending to attack 2940.00 into the noon hour.

Despite triggering bias-up, there was no afternoon momentum either way. The balance of the session ranged narrowly sideways between 2934.50-2938.00. The 2942.75 bias-up target becomes “unfinished business.” And regardless of the afternoon’s hesitation, the session formed a breakout from a multi-session range, still needing a second consecutive higher close Wednesday to confirm.

Meanwhile, S&P Cash came within 4-5 points of its ~2841 Sep 21 high. Futures were trading at a 5-6 point premium, now equivalent to 2646.00-2647.00. There’s no reason for the market to have come this close without intending to probe higher, although the path there is never assured. Sentiment is like an iron, and currently its optimism is hot. Expect the rally to strike it, unless a more powerful pessimistic sentiment heats up for whatever reason.

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