Market Wrap

The long-awaited likely test of 2902.00 was neutralized well before Friday’s open, by surging from under 2896.00. Its room for noise up to 2911.00 was eventually pierced by 3 ticks, also before the open.

The open’s gap up surged to attack 2915.00, in time to suggest that any reversal would be relatively shallow and temporary. Its reaction held a 38.2% retracement of the open’s gap, natural support.

The balance of the session firmed coming out of the morning’s bias environment. The afternoon’s bias environment was resisted by 2911.00 until the very last-minute blipped up to 2913.00.

The was a new trend high close on a Friday all but requires at least an eventual higher close. Gapping up above all prior intraday highs all but ensures recovering from any interim pullback, too. The quarterly earnings onslaught takes a much higher profile next week.

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Retesting and re-retesting Monday night’s 2900.00 high ahead of Thursday’s open makes an eventual probe only a formality. Which might not seem credible after being under pressure throughout Thursday’s session. And which might be rejected anyway if Thursday’s 2886.00 support is breaking lower through Friday’s open.

Meanwhile, Thursday was the seventh consecutive session of intraday ranging, supported at or above 2880.00 or 2886.00. Extended narrowing ranges become vulnerable to breaking falsely in one direction before reversing more substantially in the opposite direction.

So, fresh highs up to 2902.00-2911.00 would be vulnerable to reversing down, and dipping 2874.00-2876.00 could snap back up above highs. Testing either limit without reversing would become more vulnerable to extending in that direction, especially being a Friday.

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Wednesday gapped up 4-5 points back to Tuesday’s 2787.50 open. Its natural resistance became more of an attraction, and price fluctuated choppily around it through the open, through the morning, and through the noon hour. Not at all surprising, if not also expected, due to anxiousness ahead of the afternoon’s FOMC Minutes.

The impact of that anxiousness suggested FOMC Minutes were being widely watched. It also suggested that releasing the Minutes would be the catalyst to launch trending, or at least to widen the range. Its last two releases had done the same. But in a classic “watched pot never boils” scenario, price action was relatively subdued, and the window’s 2886.00-2891.50 support-resistance held.

Until the window lapsed. Trending up into the final hour touched 2894.25 — retracing 61.8% of Tuesday’s opening gap back up to Monday’s close. Its resistance reacted down 5 points before the close, which was all retraced by the last minute’s spike up.

With no “unfinished business” above requiring a test, no matter how likely otherwise, no hold-long was contemplated. But Monday night’s 2899.00 prior high’s retest remains likely, likely to include 2902.00 with room up to 2911.00, while still being vulnerable to reversing down aggressively intraday.

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Monitor overnight Globex trading in the chaRTroom here.

I wasn’t interested in being a seller when the market was indicated to open 3 points above its 2893.00 low. But a late break slid sharply to greet the open at 2885.00-2887.00. It continued sliding through the open to 2880.00. A post-open dip would have been more attractive to buy than to sell, for the outstanding attraction back up to 2902.00. But the only bounce got up to 2891.00 during the noon hour. And it was reversed back down to fresh lows attacking 2877.00.

The afternoon’s reversal back down never confirmed that sellers were gaining traction for their efforts, because the bias environment wasn’t probed when it mattered — only exiting the bias environment under the noon hour’s low, but not at the final hour’s entry and the proxy window. Delaying the pre-open break lower until so close to the open reflects weak-handed sponsorship.

That doesn’t mean the drop can’t extend lower, or that momentum will reverse up by default. Not even after the interim dips’ lower and lower lows each reacted back into the bias environment’s range, none of which recovered during a relevant timing window.

Pre-open ECB events and the afternoon’s FOMC Minutes are likely catalysts Wednesday for volatility and choppiness. Already trending up at Wednesday’s open would be likely to extend higher morning. Extending higher would be likely to visit 2902.00, and nothing prevents reversing it back down. Meanwhile, already extending down at Wednesday’s open could extend down to 2861.00.

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Monitor overnight Globex trading in the chaRTroom here.

Sunday night’s fresh highs up to 2899.50 weren’t much above Friday’s 2897.00 high. But that was enough room to discern complexity in the probe. And complexity qualified the fresh high as a “new Globex trend extreme” requiring intraday retest. Often the same day, as it did late Monday.

An entire session transpired in between. The overnight probe above the prior session’s high had flipped back under the 2896.00 earlier Globex low to form a bearish Globex-flip. The setup’s morning influence was an 8-point post-open collapse, to within 1 tick of the 2894.00 bias-down target, and holding the bias-down signal as resistance.

Not rejecting Globex-flip in the afternoon would also influence the following morning. But another 6-point dip into the noon hour was recovered through the bias environment to prevent the Globex-flip from regaining traction. And that extended to retest the 2899.50 “new Globex trend extreme,” while also producing the eventual new trend high close that became required as of Friday.

The rally’s next higher objective at 2902.00 remains outstanding, and likely — but not required, and not required to be maintained if met. Room for noise up to 2911.00 might also be utilized, but not necessarily. Almost any immediate reaction down would now have no unfinished business above helping to ensure its recovery.

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