Market Wrap

If Sandra Bullock is 1968.00… then George Clooney is 1973.00. That makes the market “Gravity.” Like Clooney, Tuesday’s open suddenly snapped free, and spent the rest of the movie — I mean, session — drifting gently and endlessly into space.

Pattern points… (Setups and technicals)[pay]
More descriptively, Sandra represents Monday’s inertia around 1968.00. Sorry, Sandra. Gapping up Tuesday shallower than 1973.00 wouldn’t have had enough force to come untethered from 1968.00. But gapping up through 1973.00 was enough force — just enough force — for the Clooney gap to break free from Sandra.

Clooney drifted from there. Not because of a jet pack or other propellant. There was no opposing force, resistance or gravitational pull. Similarly, 1973.00‘s gap extended without expending much effort — no intraday dip needed to be absorbed and recovered, and the session’s mid-section just channeled higher.

So, it’s a little difficult giving the rally’s momentum a benefit of the doubt. And it’s a little difficult assuming the close above 1973.00 has put into play new highs. After all, Tuesday didn’t so much climb higher as drift. But new highs are nevertheless in-play. Too much of the recent drop has been retraced not to be rewarded with new highs. Clooney traveled further.

[/pay]What’s Next… (Outlook and opportunities)[pay]
But now I’m questioning whether new highs will be durable. Probe new highs, yes. Trend much higher, maybe not. Regardless, those questions are much loftier than current prices. More timely is the question whether this drifting rally can defend against a negative reaction to Wednesday’s FOMC Minutes.[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.

If Monday’s high had avoided the rally’s objective… then buyers might have gained traction. That, or closing above the rally’s objective. But testing the rally’s objective set that as a bar for the close. Not closing above it means buyers expended as much buying pressure as possible without gaining traction for the effort.

Pattern points… (Setups and technicals)[pay]
The rally’s highest corrective bounce target of 1968.00 was fulfilled during Monday morning’s bias environment. It was tested during the noon hour, during the afternoon bias environment, and the final minutes. If the range were much more than 3 points, then the pattern might be considered “equilibrium.”

At least equilibrium tries to trend. This alternative can be frustrating. Ranging narrowly around the same relevant level throughout multiple consecutive timing windows can repeat that pattern the next day. Often the two days are separated by a gap open.

Gapping open within the 1954.75-1973.00 range would likely resume ranging narrowly. Ranging narrowly through the bias environment would likely range narrowly through the afternoon’s bias environment. Regardless, breaking beyond 1954.75-1973.00 through a relevant timing window would likely trend in that direction.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Unless the opening 15 minutes of volatility are trending or breaking beyond the 1954.75-1973.00 range, either no signal will trigger, or a reaction back to the other end will be likely.[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.

If not another Ukraine-Russia headline… then would expriation have extended sharply higher? Or, if not for expiration, would the Ukraine-Russia headline have had less impact? Would the bullish WedEX have inverted Friday afternoon if implemented at resistance? We can explore those hypotheticals for days. But while extraneous news does change paths, it rarely changes destinations.

Pattern points… (Setups and technicals)[pay]
Spoiler alert: Friday’s close was testing 1951.00 for a second consecutive session. And the first session to test 1954.75 failed to close above it. No higher target is in-play. Having said that, sellers didn’t regain control either. And not for lack of trying. The noon hour’s 1937.25 low was 14 points under Thursday’s cash session close. Friday’s cash session close retraced that much of Friday’s decline.

Closing only a little negative still would have been something of a victory for the rally after being ambushed by the Ukraine-Russia headline. Especially after the first hour’s checkpoints had signaled inertia. And after the sudden, steep, substantial drop, which was in-line with expectations for the corrective rally’s demise. But the decline’s resumption should be triggered by running out of buyers, and not in reaction to news that can be discounted and absorbed. News only dilutes the crowd with weak-handed knee-jerk sellers, which attracts buyers.

Meanwhile, the bullish WedEX influenced Friday afternoon bullishly. It was threatening to invert if the post-open fresh highs weren’t maintained into the noon hour. And the open’s checkpoints suggested that was coming. Influencing Friday afternoon makes WedEX even likelier to influence Monday morning, too.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Retesting Friday’s 1959.00 opening gap at Monday’s open could seal a top if rejected in time to avoid triggering bias-up. Gapping down too little would be be likely to retest Friday’s opening gap, too. Starting too high or too low would attract bigger sellers, or already reflect them… We’ll review that and other opening setups in the Saturday Strategy Session, beginning at 9:30 ET. See you there…[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.

If things are going to get volatile at the rally’s target… then Friday’s expiration influence should should produce a wild session.

Pattern points… (Setups and technicals)[pay]
Thursday’s test of the 1951.00 bias-up signal held. Simultaneously, and not coincidentally, so did Thursday’s test of the 1951.00 target for the week-long corrective rally. It held, but it wasn’t rejected.

Its reaction down during the no-bias environment only touched its 1948.25 prior low. Exiting the bias environment without yet reversing down from a target has bullish consequences. The balance of the session triggered a buy signal above 1950.25 that only returned to 1951.00, then extending sharply higher through the futures close. Room for noise around 1951.00 up to 1954.75 was met at the Globex open.

Touching 1954.75 or touching 1951.00 pre-close, then closing above or below it, would have been predictive. But 1951.00 was still being tested at the close, and 1954.75 wasn’t touched until after the close. So, higher objectives are not signaled, but neither is a reversal down.

Meanwhile, the bullish WedEX is planning to influence Friday afternoon and Monday morning. That’s going to be difficult if Friday morning were to rally up to a higher resistance, without exceeding it into or out of the noon hour. Difficult, and possibly inverted. Trending down into the noon hour could have a similar effect.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Inversion isn’t common. I’m giving it special focus here because the corrective rally’s 1951.00 target was met and held. But that, itself, is not a sell signal. And not reversing down Friday could instead head higher to 1968.00.[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.

If Wednesday morning’s rally had been delayed… then its afternoon version would have been much more capable. Allowing buying pressure to become a little more pent-up can have impressive effects.

Pattern points… (Setups and technicals)[pay]
Wednesday’s plan was on-track. Back-and-fill in the morning and then resume the overnight rally that afternoon. But, whatever its cause, the morning’s 7-point surge to 1945.00 stole the afternoon’s thunder.

It also stole some of the afternoon’s sponsorship. Big as it was, it was a fraction of the afternoon’s capabilities. At least the surge revealed elasticity, a market willing and able to rally. Allowing buying pressure to become a little more pent-up through one more timing window could have neutralized the rally’s 1951.00 target within an hour either way of Thursday’s open.

Evidence of that is being delivered after the close, which has gained 3 points to probe above Wednesday’s highs.

Correcting the surge throughout the afternoon by only 38.2% reveals optimism reaching excessive levels. Impatient buyers prevented a healthy 61.8% corrective dip. The shallower dip refueled buyers, but weak-handed buyers.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Perhaps the corrective rally’s 1951.00 target will be met at Thursday’s open anyway. There is room for noise above it to 1954.75. Testing either one early would be vulnerable to reversing down, and to ending the corrective rally from last Thursday night’s lows. Dipping first Thursday at this stage of the pattern, or simply hesitating, would be the stuff of bigger rallies.[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.