Market Wrap

In the end, Tuesday was an Inside Day, contained within Monday’s range. An upward bias that doesn’t gain traction tends to resolve bearishly. And Friday’s confirmed breakout requires at least an eventual fresh low close.

Tuesday did isolate Monday’s probe under Friday’s 2826.00 low. Which helps to reinstate Monday’s Isolation setup. Closing above Monday’s ~2844.00 high would have confirmed, and would have been reliable for retesting last week’s ~2864.00 high. None of which is very credible without gapping up Wednesday.

Only some unfinished business above was neutralized Tuesday. But enough was neutralized to enable sellers to come back in. That they didn’t — that Tuesday held its highs, does suggest at least a brief probe of fresh highs overnight.

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The oddest part of Monday’s pattern isn’t its 22-point 2-1/2 hour drop from the morning’s attack on 2844.00. It isn’t the “unfinished business above” at the morning’s 2847.75 bias-up target, or the retracement required up to its 2040.75 bias-up signal. It’s not the Isolation setup that produced the optimal opening behavior.

The oddest part of Monday’s pattern hasn’t yet happened. And it might not. But it would be Tuesday’s gap up above Monday afternoon’s 2833.50 high, which — after having trended down into Monday’s close — would form a “session-long rally” setup. Like Monday’s Isolation setup, the optimal open would not only maintain the gap up but also trend up.

Like Monday’s setup, an optimal recovery open Tuesday could also reverse into an intraday decline. But that wouldn’t be so odd, considering Monday’s failure to exploit other recovery opportunities.

Triggering a session-long rally would also help to reject by proxy Monday’s close just slightly under Friday afternoon’s low, which the Isolation setup needed to hold. And it would undermine any momentum from Monday’s second consecutive lower close under Friday’s breakout close.

Otherwise, at least a third lower close is now required. Perhaps more would follow, regardless of the unfinished business above, which includes a bias-up target at 2866.25 left outstanding last week.

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Friday morning’s 2832.00-2843.00 range fluctuated widely around its gap down to 2837.00. The noon hour was greeted at session highs, which fell relentlessly through the noon hour and afternoon bias environment to 2826.00. That’s 17 points below the high, and almost 28 points below Thursday’s close.

So, it’s interesting that the market left a trail of bread crumbs to help find its way back up Friday afternoon. No-bias trending under 2835.50 was the biggest crumb, which a late surge up to 2838.00 tested along with the 2837.00 opening gap.

The return trip got its start by neutralizing the low’s oversold RSIs. And that was done after a newly violated bounce limit, by impatient sellers that were easily absorbed. Ultimately, the afternoon’s fresh low was recovered to close back above the morning’s low. There’s no unfinished business below, and sellers were robbed of their traction.

But momentum hasn’t reversed up, which needed a close above 2841.00-2843.00. Still a lot of selling pressure was expended, without sellers gaining traction for their effort, and without signaling the trend reversing down.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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Thursday looked awfully familiar to Wednesday. Not necessarily in form, although another late plunge returned to the lows. More so in function, as the ranging above Monday’s highs persisted, a new bias objective was left outstanding, and the most influential bias was the afternoon’s noN-bias.

Thursday morning’s bias-own signal held its test to trigger late no-bias, but the offsetting test of its
2866.25 bias-up signal was attacked only to 2862.75. So, “unfinished business above” at 2866.25. That’s competing with Wednesday’s unfinished business below at 2852.00, which is likely to be probed down to 2841.00-2843.00.

Wednesday and Thursday’s late plunges help to confirm the downside objective must be resolved before resuming the rally, and gapping up to resume it is less likely. Neither 2852.00 nor 2843.00 must be tested intraday to be neutralized. Isolating one or both to the overnight and opening back within Thursday’s range could already reverse momentum up.

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A funny thing happened on the way to fulfilling Wednesday morning’s bias-down signal. Its 2851.00 bias-down target was attacked to within only 2 points when price began suddenly reversing up. The bias environment started lapsing after a surge up to 2860.00 and 2861.00, leaving “unfinished business below” at 2851.00.

Assuming 2851.00 is eventually met, the market is likely to compensate for its delay by extending down to the next lower support at 2841.00-2843.00.

Reversing down anytime soon may seem like an odd discussion after extending even higher through Wednesday afternoon. But the 3:10-3:20 proxy window tried, and failed to gain traction. Then a fresh high at 2862.50 was reversed back under the proxy window’s 2860.25 low. Which could have been a compelling hold-short.

And then price collapsed.

Plunging through Wednesday’s close settled 1 point under 2856.00, which had been the overnight low and the morning’s bias signal. The intraday bounce seems more clearly to have been a detour. And 2851.00 seems more clearly to still be in-play.

2851.00 can be fulfilled, and held, overnight. Regardless, gapping up Thursday above Wednesday’s 2861.00-2862.50 highs would resume the rally. Upside potential would still be 2873.00-2883.00.

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