Market Wrap

If Friday afternoon had recovered from probing a fresh low… then it would would have been “ineffectual pessimism.” The open gapped down, the entire session was spent in negative territory, and the prior low was probed — without closing below it. A temporary fresh low during the afternoon was the setup’s missing element. Too bad. That would have made the rally likely to continue Monday. Strike one…

Pattern points… (Setups and technicals)[pay]
Unlike Friday morning’s low, Thursday’s low was probed. Twice. Each was recovered before the timing window lapsed, but no prior high was recovered to gain traction for the effort. Probing the lows only chipped away at support. Strike two.

Thursday’s new high close was a breakout from several multiple prior sessions. Fresh highs overnight were not maintained, and Friday closed negative. Without a second consecutive higher close, the breakout is unconfirmed. Strike three.

The overnight high wasn’t much higher. And whatever complexity it had was subject to an errant tick that touched prior highs before extending higher. A “new Globex trend extreme” would have required being retested intraday, and help to prevent an immediate decline from extending. Strike four. This isn’t baseball.

Friday morning’s dip touched “lower prior highs” at 1549.25-1550.00 before bouncing back into Thursday’s range. The bounce filled the gap back up to Thursday’s 1552.50 open. Neutralizing its attraction above, which could otherwise have helped to prevent an immediate decline from extending. (All together now,) Strike five.

Finally, closing Friday above Thursday’s new trend high close would have ensured an eventual higher high, if not another new high close. (So does a new trend high on expiration.) Strike six.

Okay, fine. Two batters down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
None of the above is a sell signal, but it puts a lot of performance pressure on Monday, the next batter. Perhaps only expiration prevented Friday from resuming the rally after the open’s surprise dive. Then Monday’s buyers should hit it out of the park to compensate for the delay, and to offset all of the strikes above. But probing fresh lows again would be another strike… [/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 the 1553.50 was such a big deal… then where were the balloons? Where were the fireworks? And why was 1553.50 still being tested in the afternoon? The rally gets one day to prove its breakout. Possibly, not even that long, depending on the open.

Pattern points… (Setups and technicals)[pay]
The long-awaited and much teased test of 1553.50 was sort of a letdown. First, it was already tested overnight before Thursday’s open. Then, the cash session ranged around it as each timing window overlapped it.

Each leg’s higher highs and higher lows does suggest there will be follow-through. Actually closing higher Friday might be another issue. It would confirm Thursday’s breakout, with potential to 1575.00, but little if any pullback here can be tolerated.

Gapping down would not, itself, be bearish. Gapping down and then extending down could be very bearish. The nearest attraction is “lower prior highs” at 1549.25-1550.00. Gapping down to it and then firming would be likely to recover entirely. Gapping down to it and then ticking down for several minutes would be likely to extend down much further through the day..

[/pay]What’s Next… (Outlook and opportunities)[pay]
This being expiration, trending throughout the opening 15 minutes — throughout — tends to extend much further in that direction through the day. This being expiration, the morning’s bias signal tends to persist not only through the noon hour but well into the afternoon… Thanks again to all for your patience in my mid-day absence Thursday.  [/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 had at least probed prior highs… then some signal could have triggered to predict expiration’s bias. Thursday’s opening action might suffice.

Pattern points… (Setups and technicals)[pay]
Wednesday morning’s Euro sympathy plunge was retraced entirely by Wednesday afternoon. The cash session close was 1 tick above the plunge’s 1548.25 origin, so buyers did the least possible to gain traction. And they left more “unfinished business above.” The same 1553.50 bias-up target as Monday had left outstanding.

Despite their repeated efforts, sellers still behave like the same weak hands as Tuesday. Touching the 1551.00 prior high again reversed back down without first probing above it. The plunge’s test of 1543.00 support held through the opening 15 minutes of volatility. The 1541.50 downside objective was met to within 3 ticks. At least a probe of fresh highs is almost obligatory at this point.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The WedEx indicator did not trigger since no prior high or low was even tested intraday. Immediately probing fresh highs Thursday could serve by proxy, and that probe’s resolution would be the late signal. Regardless, Tuesday and Wednesday’s volatility within the range — not probing a prior high or prior low — suggests that expiration will be volatile, too. [/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 the WedEx indicator intends to be bullish… then Wednesday would need to rally sharply. That would be to trigger an actively bullish signal. A passively bullish setup isn’t available. But a couple of bearish setups are.

Pattern points… (Setups and technicals)[pay]
Despite gapping down at Tuesday’s to 1549.50, a reversal tested a fresh high at 1551.00. And despite reversing the open’s gap down, the probe of fresh highs was rejected by a deeper drop to test 1542.00. And that defined a Pivot Reversal setup, since the sequence developed in an uptrend.

The setup had its shortcomings, like shallowness and impatient timing. The shallowness stopped short of fulfilling the 1553.00 unfinished business above from Monday, and also only barely pierced prior highs. The impatience was more problematic.

Because the new high was rejected during the morning, the session closed above the noon hour’s low, testing its high. This is not typical of a Pivot Reversal. Instead, the setup usually reverses back down in the afternoon, trending entirely under the noon hour’s range. But Tuesday afternoon was spent ranging around the morning’s low, and not trending down.

All of the pattern’s shortcomings could be overcome by immediately extending down sharply Wednesday. That, or by rejecting another probe of fresh highs. Otherwise, we’ll consider sellers as being impatient, and therefore weak-handed.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Another Up/Down-Crash is forming. Its 10-11 period trending includes only 1-2 non-consecutive counter-trend sessions. Tuesday was the second counter-trend session. The setup has formed twice previously this year, and only identified a point of major hesitation, but no crash — up, down, or otherwise. Wednesday afternoon or Thursday morning would be the last opportunity for the pattern to be influential. [/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 WedEx triggers an actively bullish signal… then it wouldn’t be very credible after rallying throughout Tuesday. So, just the potential for extending the rally much more seems to depend upon dipping Tuesday. An actively bearish WedEx also depends upon dipping Tuesday.

Pattern points… (Setups and technicals)[pay]
1553.50 became “unfinished business above” for being Monday afternoon’s bias-up target, and not rejecting the underlying signal. Piercing the 1548.25 bias-up signal by only 1-tick coming out of the bias environment quickly recovered to a fresh high attacking 1551.00. And a fresh low at 1547.50 into the last half-hour was recovered back to the high.

Of course, the last  recovery did not accomplish anything that wasn’t done already before the last dip. So far, the late recovery is only noise, and not the product of new sponsorship. Whatever it is, it is not in itself bullish or bearish.

The last hour’s resemblance to Friday’s session-long swing suggests that the same sponsorship influenced both windows. And that sponsorship’s objective was fulfilled by producing a new high close.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Extending higher immediately Tuesday to fulfill the 1553.50 target would allow the balance of the session to trend down. Extending up without first refueling might not be immediately bearish, but the rally’s life would depend upon accelerating its pace into a blow-off. Perhaps the most bearish scenario would form a Pivot Reversal: Gapping down in the uptrend, and recovering temporarily to probe new highs before reversing back down to close under morning’s low.  [/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.