Market Wrap

Wednesday’s Expiration Indicator triggered… and it confirms expectations for testing unfinished business. Things could get really interesting if it were fulfilled before Friday afternoon.

Pattern points… (Setups and technicals)[pay]
Wednesday’s last pre-open dip to 1397.50 reacted up through the open to 1404.50. That was Tuesday afternoon’s highs. It was pretty much Wednesday’s high, too. A brief probe up to 1405.75 just before the final hour was retraced back down to Tuesday morning’s 1402.50 low. That was Wednesday afternoon’s low, too.

So, despite preventing the morning’s recovery from extending higher, sellers did not gain traction for their efforts.And the morning’s 1407.00 bias objective became “unfinished business above” that requires being tested.

Meanwhile, Wednesday’s Expiration Indicator is passively bullish for closing back above the prior structure’s 1402.50 lows. An “actively” bullish signal required closing back above the 1404.50 prior high. Thursday’s open could still trigger an actively bullish signal by proxy above 1407.00.

By the same token, an actively bearish signal could trigger by proxy back under Wednesday morning’s 1400.50 reaction low. Not triggering it through the open would confirm the bullish indicator, whether active or passive.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s Expiration Indicator influences Friday afternoon and Monday morning price action. An interim dip is not required, but would be likely to recover. A retest of Tuesday’s 1409.50 “new Globex trend extreme” is likely, probably at least up to 1412.00. Back under 1399.50 through any relevant timing window would be a problem for any bullish resolution. [/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.

Sellers had all day to reject… the breakout above prior highs. Each intraday bounce had been shallower than the last, always returning to session lows.A late break lower was very productive, very quickly, but recovered into the close. Will buyers exploit it?

Pattern points… (Setups and technicals)[pay]
1406.00-1407.00 was met, and its buying pressure was satisfied. Tuesday’s gap up to 1406.75 was filled after an interim dip back under prior highs, neutralizing its attraction. The 1409.50 pre-open high’s “new Globex trend extreme” doesn’t require an immediate retest, but would likely be retested nevertheless up to 1412.00 — especially so long as 1397.50 were to hold as support.

Entering the final hour avoided triggering a bullish signal, and the 3:10-3:20 timing window probed under the bias environment’s 1402.25 low. The combination was not necessarily being bearish. But it was exploited by there being so long without follow-through to fulfilling a major target hours earlier. Fresh session lows extended down to 1397.00.

Tuesday afternoon’s break lower was so productive so quickly. Yet, it came too late for any confidence that it was not an isolated event. Too many other intraday opportunities had been ignored. The break’s 1397.50 objective was met, and the cash session close bounced sharply.

Closing under 1403.00-1404.00 essentially broke free from the near-term attraction back up to retesting the pre-open 1409.50 “new Globex trend extreme.” Closing just under 1403.00-1404.00 by only a narrow margin makes me suspicious that 1409.50 will be retested anyway, and probably up to 1412.00. Opening Wednesday under 1395.25 would suggest otherwise.

[/pay]What’s Next… (Outlook and opportunities)[pay]
This week’s busy econ calendar continues Wednesday. Initial trending would be vulnerable to reversal, especially post-open.[/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 at first they don’t succeed… or at second, or at third, or at seventh… Sellers will try, try again to break lower. And buyers will absorb their attempts. It became glaring last Thursday that sellers were not gaining traction for their efforts. It is starting to become glaring that buyers aren’t exploiting that.

Pattern points… (Setups and technicals)[pay]
Unfinished business above at 1402.00, just like Friday, completed Monday afternoon’s recovery from the morning’s decline. The morning’s decline had tried to reject the overnight rally. The overnight rally had tried to recover from… It’s like a ping-pong match.

In the process of chipping away at resistance Monday, there was more chipping away at 1393.50-1394.25 support. It remains unlikely to prevent a much deeper drop when tested — if ever tested — from a new relative high, like 1406.00-1407.00.

An earlier test of 1402.00 Monday would have produced fresh highs at 1406.00-1407.00 before the close. Its eventual test remains likely, and its test is getting likelier to visit 1412.00. Simply breaking back under 1393.50-1394.25 would make any fresh high much less likely.

[/pay]What’s Next… (Outlook and opportunities)[pay]
More than a week of slow economic news will end as of Tuesday morning. Perhaps that’s what was holding back the rally. Or holding up the market.[/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 sellers couldn’t extend… any the week’s multiple sell-offs, then the weekend’s impending illiquidity could only hurt their chances. That was the premise for a rally Friday. It became the premise for absorbing Friday morning’s two significant sell-off attempts. Then it again became the premise for a rally that developed into the close.

Pattern points… (Setups and technicals)[pay]
Friday morning’s no-bias environment had put into play a test of the 1402.00 bias-up signal. It became “unfinished business above” by exiting the bias environment above the 1395.50 bias-down signal. The afternoon’s narrow ranging needed only to avoid breaking under support for the attraction above to work its magic.

It helped that there was a premise for rallying Friday. Retesting 1393.50-1394.25 yet again did not necessarily help Friday’s rally. It probably only delayed it.

The morning’s sell-off(s) did chip away further at 1393.50-1394.25 support. This will become an issue eventually — perhaps sooner rather than later, since the week’s extended ranging has made the next breakout attempt likelier to fail from a lower level, e.g. 1406.00-1407.00. But some fresh high must first print before the next reversal to support can fail.

Meanwhile, 1406.00-1407.00 could be extended up to 1428.00. Not that this would be any more bullish, or much lengthier. And as usual, breaking under 1393.50-1394.25 through a relevant timing window could avoid printing fresh highs before reversing down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget, there is NO Saturday Strategy Session this weekend. Feel free to request stock analyses throughout the week as needed.[/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.

Are you ready to… rally? The market at least seems unwilling to trend down. The reaction down from Wednesday night’s fresh highs — like Tuesday night’s reaction down — was largely recovered Thursday. That’s not in itself bullish, but recent pessimism has proved not to be bearish. And the weekend’s illiquidity is fast-approaching.

Pattern points… (Setups and technicals)[pay]
Thursday afternoon’s ranging never signaled that sellers were gaining traction. The bias environment’s exit was probing the noon hour’s high, and the final hour was probing the bias environment’s high. No buy signal exploited the setup, and the position-squaring window’s test of support held.

Much less selling pressure was expended Thursday afternoon than during the drop from Tuesday afternoon or Wednesday night’s highs. But only Thursday afternoon’s selling pressure has yet to follow the pattern and recover.

Once again, sellers must be in obvious control immediately Friday to be credible at any other time intraday. Gapping down or sliding sharply through the open would get every benefit of the doubt for extending down. This being a Friday, the morning’s bias is likely to persist through the noon hour.

This being a Friday, with so much unproductive selling during the past several days, not trending down immediately would be vulnerable to rallying into the weekend.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday morning’s 1402.75 high already retraced 61.8% into the overnight Double Top. It serves by proxy as already having retested that high, leaving no reason to probe any higher — no bullish reason. So, lmost any fresh high above it would be bullish for at least 1406.00-1407.00. Breaking under Thursday’s lows would put the highs behind us.[/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.