Market Wrap

My best wishes to you and your family for a Happy and Safe Thanksgiving!

Pattern points… (Setups and technicals)[pay]
Despite retesting 1161.00 and neutralizing its oversold RSIs, no buy signal could be considered Wednesday without recovering above 1166.00. But its recovery up to 1168.00 and 1170.00 came too late to be relevant, after the session’s last hour had begun.

A buy signal could have been considered after fresh lows testing 1158.50-1159.25. But a plunge back under 1166.00 down to 1158.50 didn’t even begin until getting to within 5 minutes of the cash session close.

1160.00 wasn’t really probed until after the cash session close, and it was recovered through the futures close, so 1160.00 is essentially the “new Globex trend extreme” that requires an intraday test.

Recovering 1166.00 could extend up to Mon-Tue “higher prior lows” at 1182.00-1183.00. But a second consecutive lower close under 1161.00 would confirm the decline’s momentum remains intact and next targeting 1142.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
S&Ps trade normally on Globex overnight, closing at 10:00am ET on Thanksgiving Day. They re-open at 6:00pm. Meanwhile, Europe is open. Wide-open. I will update the blog only as needed, and will hold the next Market Tour on Friday morning.[/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.

Wednesday’s session has a normal closing time… but afternoon participation will probably rival weekend volume levels as many participants leave early for the holiday weekend. That environment is no time to be forcing a trade.

Pattern points… (Setups and technicals)[pay]
Monday’s drop tested and held 1190.00 as support. Its own afternoon had potential to begin a recovery, but did not. Repeated overnight probes of fresh highs could have gained traction, but did not. And the same applies to Tuesday afternoon’s recovery from probing under Monday’s low. No traction.

Not that sellers had any stronger sponsorship. They didn’t accomplish much more than did Monday’s sellers. Tuesday’s fresh low was all of 5 ticks lower, and the bounce never probed above Monday’s high before peaking. A post-close 6-point slide to 1180.00 came to late to reflect strong hands.

In those respects, the pattern is no weaker now than it was at Monday’s close. Except that not yet rallying suggests the market may be intent upon visiting something under this week’s lows. And that would be dangerous if not quickly recovered back above 1182.50 to avoid gaining traction in the compact time remaining. Otherwise, gapping up Wednesday or immediately recovering the 1205.00 area would be credible for extending higher into Friday.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The holiday shortened week moves some econ reports into Wednesday, which tends to confuse the market. The effect can be only temporary, or it can trigger a pattern that has been forming. Normal reactions are not likely. [/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.

It’s the question on everyone’s mind… Did Monday’s market bottom, or not? And if not, will it hold a retest? And if it were to hold a retest, how deeply would it be probed first? Finally, isn’t that three questions, not one?

Pattern points… (Setups and technicals)[pay]
Monday’s sell-off neutralized all unfinished business below. It was easy, since there was no unfinished business below. There wasn’t going to be a bottom without first probing a fresh low at 1205.00. But there was no pattern actually targeting it.

Delaying 1205.00‘s test made 1190.00‘s test likely, too. It was probed by nearly 10 points down to 1180.50, then recovered up to 1196.75. Ultimately, 1190.00 held as support through the close. Sellers gained no traction for their efforts.

Buyers gained no traction for their efforts either. A short-squeeze had become possible by exiting afternoon bias environment above the prior timing window’s high, targeting. The squeeze-like behavior only tested the pattern’s initial 1196.00 target. A close above it or its 1200.50 target would have signaled momentum reversing up. But the close was under each.

[/pay]What’s Next… (Outlook and opportunities)[pay]
There was an opportunity to bottom. There is still an opportunity to bottom. Monday was not a bottom. Retesting Monday’s low could form a bottom, which would be dangerous since Monday’s low might not hold. Gapping up enough might launch a bounce, but it would leave a gap outstanding below. [/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.

Don’t forget about the weekly Saturday Strategy Session… Its link is in the blog’s sidebar. Start time is 9:30am ET, but you may log-in up to one hour earlier.

Pattern points… (Setups and technicals)[pay]
Wednesday’s Expiration Indicator was at work probably at work in absorbing Thursday night’s 15-point rally up to 1230.00, and reversing it into negative territory down to 1209.00.

But the downward bias it predicted is applied mostly to Friday afternoon and Monday morning. And while Friday afternoon also absorbed a rally — from 1213.00 up to 1220.00 — it lacked the spectacle of the morning’s retracement. Nevertheless, it fulfills the downward bias.

Monday morning is also likely either to trend down or to retrace overnight strength. Higher highs may yet test 1222.50 or 1225.00 — perhaps 1230.00 — but then likely reverse down. Recovering 1225.00 through the open could gain traction to rally, but the Expiration Indicator’s downward bias otherwise gets every benefit of the doubt.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Another weekend, another string of headlines. The chartroom will be available at Sunday night’s Globex open, and I’ll be in there then or soon after to comment. [/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.

Thursday afternoon’s ranging… had two consecutive timing windows available to reject the noon hour’s plunge to new lows. Neither one recovered. Perhaps the delay was expiration related. Perhaps that will be the reason behind lower lows Friday.

Pattern points… (Setups and technicals)[pay]
Hours were spent ranging at session lows Thursday afternoon, waiting in vain for a fresh low under 1206.75. Dip after dip held at or above prior lows. There was n errant tick at 1206.50. But it wasn’t quite the 1204.50-1205.00 objective whose recovery could form a bottom.

Its 6-point reaction became a 10-point reaction when the range’s upper-end was attacked up to 1216.75. But that was just a test of 1215.00, whose resistance is the lowest buy signal until new lows are actually probed and recovered. Piercing at the close came too late to be actionable.

The two paths higher are either to recover from probing fresh lows, or to immediately recover 1225.00-1230.00. It is probably too late for the former, which would have been helpful Thursday afternoon. The latter would be only temporary, leaving outstanding a gap back to Thursday’s close.

Considering the relevant weakness following Wednesday’s Expiration Indicator, almost any recovery attempt would be viewed suspiciously, as being likely to fail and reverse, and to resume trending down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Whether trending down without delay, or first bouncing, resuming the decline Friday could become very ugly. Testing 1204.50-1205.00 Thursday afternoon would have triggered a corrective bounce throughout Friday morning. Now fresh lows might not bottom before 1190.00. And bigger support lies below there at 1178.50. This does not necessarily marginalize buyers — having extended down already on new, the expiration indicator is always vulnerable to inverting into a rally.[/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.