Market Wrap

Reaction to Tuesday night’s election results fostered a sizeable overnight rally that greeted Wednesday’s open at 2779.25. Potential for a short-squeeze was fulfilled immediately by surging to pierce the 2787.00 pre-open high by 3 ticks. The squeeze was quickly retraced almost entirely back down to its 2773.50 pre-open low.

But no lower.

That was not the final opportunity to reverse the intraday trend down, but it was pretty much the last opportunity to marginalize sellers for the day. Which they were, anyway, as the rally extended relentlessly to 2815.00.

Interestingly, that’s essentially — a couple of points higher, actually — the initial bounce limit for extending the corrective leg that otherwise should have held 2787.00. Its next higher objective is the 2850.00 area.

Ending the corrective bounce without extending any higher would all but require rejecting Wednesday’s leg without any further delay. Gapping back down under the afternoon’s 2793.50 bias environment low would be credible. Otherwise, almost any shallower or later weakness Thursday would more likely be only backing-and-filling before resuming the rally.

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

Monday’s close had fallen short of signaling the next higher attractions in-play. An overnight probe of fresh highs up up to 2746.00 had ended before reinstating Monday afternoon’s upside momentum. Finally, a deeper pullback to 2730.00 was recovered back above 2738.00 to reinstate upside momentum. The higher attractions were quickly filled up to Friday’s 2751.25 opening gap.

The balance of the session essentially ranged sideways. Up a little to 2753.25, down a little to 2738.00 (where oversold RSIs will require an eventual retest). Then firm back into the range above 2746.00 and await the overnight election resul… WHOA WAIT A MINUTE…

The last 15 minutes suddenly surged 16-17 points through the close up to 2761.00. We had just finished the Market Wrap’s discussion of potential up to 2758.00. Let’s adjust that up to 2764.00. Not that 2758.00 requires a retest — it isn’t a “new Globex trend extreme” — but there’s still room for noise.

Perhaps anxiousness ahead of Tuesday night’s election results kept the session ranging choppily sideways. Perhaps last-minute optimism (what could go wrong?) accounts for the late surge. We’ll know more overnight, and I’ll be checking into the chaRTroom to compare market sentiment and high-profile race results for any predictive values.

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

The overnight rally didn’t start so late that it would be doomed to failure. But the open’s 11-point gain up to 2733.00 was reversed into negative territory at 2717.00. That leg’s timing should have doomed any other bounce to failure. But the NDX collapse that influenced it was waning, and soon another rally was probing the open’s high.

The bias environment wasn’t exited high enough to invalidate its “unfinished business” below at 2709.50. Which tells us that the interim rally is counter-trend. But it doesn’t tell us where the counter-trend rally will peak. The obvious attraction is Friday’s 2751.00 gap up above all prior highs, but that’s not necessarily where the next downleg begins.

Already, Monday afternoon’s bias environment has rallied to attack 2744.00. Overbought RSIs there require a retest, and the next higher attraction is 2748.00. Putting 2709.50 back into play first would require gapping down Tuesday back under 2731.00-2733.00.

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

Thursday night’s 35-point surge was triggered after midnight by favorable China trade war news. Friday morning’s Employment Situation report couldn’t have been greeted much more optimistically. Especially not after gaining no traction for rallying into AAPL’s earnings, and then reacting only within the afternoon’s range and no lower. Potential to 2766.50 was attacked to within 1 tick.

The report didn’t trigger much of a reaction. But more important, there was no reaction left to trigger. And the favorable overnight China story was starting to fall apart. So did the market, which invalidated the morning’s bias-up signal, and trended down through the noon hour. Its 2700.00 target was probed by 6 ticks.

The balance of the session chopped higher. First to 2715.00 which was reacting down 11 points on the way to new lows. Next was another spike up to 2728.00 on China trade news. It was still negative territory, and a bias-down, so the balance of the session ranged sideways.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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If there were any single-worded tip to navigating Thursday morning’s wide swings, it is impatience. Multiple signals, up and down, all triggered multi-point moves that were produced within minutes. Even more quickly, the moves were retraced to their triggers and then quickly reversed in the opposite direction. Substantially.

If there were any single-worded tip to navigating Thursday afternoon’s narrow ranging, it is patience. And a lot of it, because the narrow ranging actually began at the morning’s bias-environment exit. At least we knew which way the range was likely to resolve, which would probably be different from Wednesday’s collapse after also ignoring breakout opportunities.

Perhaps the afternoon inhibition / anxiousness was due to AAPL’s post-close earnings (which we discussed intraday would be greeted from a position of weakness). This could have formed backing-and-filling instead of eking higher. The former would have been defensive posturing and potentially bullish from a contrarian perspective. The latter’s optimism was potentially bearish. More so, after fulfilling the minimum requirement to probe Wednesday’s 2737.00 high and preferably touch 2741.00.

Closing above Wednesday’s 2737.00 high would have been bullish, had the breakout been underway prior to ignoring the timely breakout opportunities. Instead, it is potentially bearish from a contrarian perspective. And having stretched the optimistic rubber band intraday, without validation from the post-close earnings, the entire retracement of Thursday morning’s Trump tweet headline reaction is free to be retraced — there may even be an air pocket under Thursday afternoon’s range.

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