Market Wrap

FOMC policy statements already offer the most opportune trading windows. The quarterly Q&A is even better.

Wednesday’s was greeted after having expended all room for intraday noise, back up to Tuesday’s 2928.25-2930.25 highs. Already having probed higher overnight to Friday’s 2934.25 close, its intraday retest was likely at least to test 2936.00 — in fact, that was the afternoon’s bias-up target. The FOMC reaction soon touched 2936.00, and awaited the Fed Chair.

The Q&A triggered a drop targeting 2924.00-2925.00. Its test produced a bounce through the 3:10-3:20 proxy window, when breaking lower would have triggered a collapse. A collapse developed anyway — from attacking Tuesday’s highs up to 2930.00 and plunging to 2907.50.

“Lower prior highs” at 2914.00 was tested, and maintained its break, as did 2919.00. Exiting Thursday’s open above 2914.00–2919.00 would be optimal for a morning bounce. Launching a durable rally would be premature. The pattern’s next lower attraction is 2900.25.

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 bounce up to 2934.25 barely filled the gap back up to Friday’s close, probing back into its late dip. The gap actually remains unfilled because overnight tests don’t qualify, only intraday. Nevertheless, its resistance pushed price back down to greet Tuesday’s open back at Monday’s highs.

The rally didn’t start so late that its breakout attempt was necessarily false. It wasn’t so shallow that it couldn’t produce the gap up a rally would need if it were going to start before late afternoon. And the pre-open reaction down wasn’t incapable of rallying through the open.

But new sponsorship wasn’t found. And the balance of the session trended down choppily.

The critical 2919.00 support was probed twice Tuesday afternoon but held its recovery through the close. An overnight dip to 2914.00 wouldn’t be surprising, nor would already recovering from it into an opening rally, gapping up too  compensate for Tuesday afternoon’s buyers not gaining traction.

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

Monday’s response to the China tariffs was predictable. Perhaps the session was inhibited by anxiousness awaiting a response from China. None of which matters to the pattern, so long as it reactions hold relevant levels through relevant windows.

The week began by gapping down Sunday night. Its 2925.00-2930.00 range broke lower Monday morning to test 2918.00. Two intraday attempts to at least recover the overnight range were able only to test 2926.00. Buyers were unable to gain traction for their effort.

Meanwhile, Monday’s selling did satisfy selling pressure down to 2921.25. And 2919.00 avoided breaking lower through a relevant window. So, sellers didn’t gain traction for their efforts either. Another intraday dip is possible, perhaps to “lower prior highs” at 2914.00, so long as 2919.00 recovers through the window that probes it.

Tuesday morning isn’t any likelier to probe higher or lower. And rallying in the morning all but requires gapping up. And Monday’s range should resolve up to avoid extending the decline substantially.

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

Friday’s open was a totally different picture from a pre-open attempt to reverse the trend down. Breaking under the 2838.00 earlier Globex low would have been bearish for the morning. But surging back up to the 2945.50 overnight high didn’t prevent probing under 2838.00 anyway.

The difference is that Friday’s selling pressure amounted to 10-11 points off the highs. Applying that much selling pressure to an open under 2838.00 would have damaged the ongoing uptrend. Instead, Thursday afternoon’s 2936.00 last relative low ultimately held as support.

Similarly, all of Friday afternoon trended down from 2944.00 to 2935.00. It is an easily discernible series of lower lows and lower highs, forming an intraday downtrend. A lot of selling pressure was expended, while still failing to gain traction for the effort.

The bullish WedEX by proxy certainly wasn’t influential, so an aggressively bullish Monday morning is not at all reliable. Nonetheless, any immediate strength Monday would be credible retracing and reversing Friday afternoon’s decline. “Unfinished business” at the morning’s 2947.50 bias-up target remains outstanding, too.

Join us at the Saturday Review to discuss paths up and vulnerabilities to extending down anyway…

Details and other markets coverage are discussed in the post-market Wrap recording here.
SATURDAY REVIEW BEGINS AT 9:30 AM ET.

Gapping up Thursday and trending higher relentlessly into the afternoon confirms the longstanding bigger picture’s expectations that new highs be made aggressively into an ultimate top. The expectation has also been for multiple consecutive uptrending sessions, which is likely since expirations rarely produce trend extremes. We’ll discuss that in more detail this weekend.

Meanwhile, simply maintaining Thursday’s gap up serves by proxy to form a bullish WedEX. That will apply to Friday afternoon – Monday morning. Friday morning might trend up anyway, too, since Thursday afternoon’s final hour entry and proxy window gained traction, and the position-squaring window didn’t reject it.

Thursday afternoon’s traction doesn’t immunize Friday morning from a pullback. Neither would a Friday morning pullback interfere with the afternoon’s bullish WedEX influence. Regardless, keep in mind that expiration — Quad Witch, no less — can accentuate, accelerate, or prematurely abandon otherwise reliable signals.

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