Market Wrap

Not firming aggressively at Thursday’s open made a drop increasingly likely, with potential down to 1311.00. It was probed down to 1309.25. It was recovered up to 1315.00. So, the natural question is, whether that was only a correction…

Pattern points… (Setups and technicals)[pay]
Wednesday’s breakout close was not confirmed Thursday. Another breakout can still be attempted Friday by closing above 1318.00-1321.00. Simple enough, considering the last half-hour’s bounce already recovered up to 1315.00.

Of course, another breakout attempt would still require confirmation Monday, and that’s the problem. Friday breakouts are rarely confirmed Monday. So, it is increasingly likely that a top is forming. That doesn’t preclude a breakout attempt, especially if Thursday’s late bounce doesn’t hesitate extending higher at Friday’s open.

A shallow dip Friday morning could still recover, or at least range sideways through the close. But a retest of Thursday’s 1309.25 low would also challenge support at 1308.00. And the 1305.00 support under there was already chipped away totally during this week’s morning dips.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Despite Thursday’s steep deep slide, the burden of proof remains on sellers to actually break under a prior low. Otherwise, the most bearish scenario would be continued sideways ranging.[/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.

Seems like old times… There was a time when FOMC announcements were framed by handicapping the likelihood for raising or lowering rates. Price action was always volatile in the announcement’s wake. Those days are long gone, so the Fed’s marketing department launched the quarterly presser to incite activity. And it works…

Pattern points… (Setups and technicals)[pay]
1343.00, here we come? That’s the next higher objective above 1311.00. And Wednesday finally closed above 1311.00.

Prior probes above 1311.00 reached up to 1318.25 (Monday morning). Closing above it Wednesday triggered the signal. A second consecutive higher close Thursday would confirm.

One challenge to extending higher is that Wednesday’s cash session close was testing 1321.00. This was the afternoon’s renewed bias-up target that was put into play by (barely) exceeding the 1315.50 bias-up target through 1:20.

Was too much buying pressure satisfied already for Thursday to confirm Wednesday’s breakout? Firming aggressively above Wednesday’s 1324.75 high through the open should gain traction to extend higher. Otherwise, at least the morning would be vulnerable to a dipping back to 1311.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
A dip could still recover Thursday afternoon to confirm Wednesday’s breakout. Just avoiding a meltdown would allow another rally attempt Friday. But the alternative to extending higher Thursday or Friday probably is a meltdown of sorts, which would be obvious by noon, if at all.[/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.

Was it all about AAPL? Really?… Tuesday’s recovery from its opening low got hung up on something. AAPL’s post-close earnings were too specific. A post-close surge in reaction to AAPL’s earnings suggests otherwise. Is the market really so focused on single-stock results?

Pattern points… (Setups and technicals)[pay]
Price trended down Monday night. Tuesday’s open immediately fulfilled selling pressure at the morning’s 1302.00 bias-down target. And 1305.00‘s recovery never looked back. Its recovery never really looked up, either.

The 1309.75 resistance held two tests, but positive territory was never recovered. Not intraday. The session was ineffectual pessimism: opening gap down, probe prior lows trade exclusively in negative territory — without trending down. Ineffectual pessimism, which is potentially bullish from a contrarian perspective.

APPL’s post-close earnings triggered a spike up that probed Monday afternoon’s high up to 1316.50. The morning’s pattern made such higher highs possible for the afternoon, but they never came. The session’s pattern made such higher highs possible for Wednesday, but they have already come.

1316.50 was Monday morning’s bias-up target, and it already held once. Recovering it or not through Wednesday’s open would dictate momentum through the morning. Quickly rejecting Tuesday’s post-close surge through Wednesday’s open would point down sharply.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s FOMC unusually-timed news and its later press conference are still relatively new influences, so price action should be interesting throughout the day. [/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.

Early to bed, early to rise… Sunday night’s gap down was reversed well into positive territory Monday morning. The recovery was rejected entirely, but not sustainably. The benefit of the doubt is on strong sellers to undermine the rally, but weak buyers are doing that pretty well themselves.

Pattern points… (Setups and technicals)[pay]
Exiting Monday morning’s bias environment back under 1313.00-1314.00 signaled that the rally was done. Had strong hands sponsored Monday’s opening rally, then they would have held the pullback limit. But 1311.25 didn’t break lower until the morning’s bias environment was already lapsing. Strong hands would have broken lower earlier.

Although the rally had ended, a decline had not necessarily begun.

Strong hands could have regained control in the afternoon. Sellers could have extended under Friday’s test of ~1306.00 support. Buyers could have recovered last week’s ~1311.00 highs. The only effort that was made was made by buyers, and that effort was not maintained through the close. In fact, a 61.8% retracement of the morning’s drop peaked upon testing the 1313.00-1314.00 as resistance.

Without sellers yet gaining traction through the close, intraday rally attempts remain possible. There is no unfinished business above or requirement to extend any higher. So, any probe of fresh highs must be rejected through a relevant timing window to avoid gaining traction.

There is unfnished business below at Monday’s 1305.00 oversold RSIs. Closing any lower should seal a top, or at least launch a pullback targeting 1285.00. Otherwise, there is potential to probe 3 points above Monday’s 1318.25 to 1321.25.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s close, or else Wednesday’s open, should offer a clear indication of whether the rally is topping and preparing to reverse down, or if it is extending to the next higher objective.[/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.

Friday’s narrow range revealed the dark side… of expiration. The monthly event tends to be a lot of something. Usually it’s a lot of volatility. But Friday it was a lot of nothing. Until the end…

Pattern points… (Setups and technicals)[pay]
Wednesday’s Expiration Indicator was in hiding as Friday afternoon got underway. The morning’s narrow ranging had failed to exploit the open’s gap down. Two recovery attempts had failed at 1309.50. And the range’s 1306.00 support was being retested again.

Either the signal was going to fail and the bottom was going to break, or the signal’s upward bias would save the day. It was the latter.

That helps to maintain confidence in the signal. And that helps to anticipate an upward bias off of Monday’s open. Even if the open were to gap down, the balance of the morning should trend back up. Opening higher, flat, or only slightly lower would be likely to probe fresh highs above 1311.00.

Closing above 1311.00 would put into play a higher objective beginning at 1343.00. The signal would be subject to a second consecutive higher close. But the signal would not trigger if fresh highs Monday are reversed before the close. And except for  Wednesday’s Expiration Indicator, no fresh high above 1311.00 is required.

Oversold RSIs seem to require a retest at Friday afternoon’s 1306.00 low. I tend to discount that requirement since the reading developed in an extremely narrow range, and during expiration. Nonetheless, be mindful of its potential attraction.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Saturday’s Strategy Session was very interesting. The recording’s first half-hour fully describes the current market influences. [/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.