Market Wrap

Monday’s recovery had extended through the futures close to fulfill its 2812.50 afternoon bias-up target. Then overnight action extended higher to fulfill Friday’s Isolation setup objective of retesting last week’s 2818.00 highs. The overnight rally extended even higher to open at 2823.00, extending through the open up to 2831.25. All off of the overnight dip to 2792.00. Exhausting.

In fact, exhausted. Reversing down during the morning bias environment to 2821.00 fulfilled the pullback’s objective. Its reaction up to 2827.00 was reversed during the afternoon to its 2812.50 bias-down target. Also exhausting.

The vulnerability to a morning reversal was discussed pre-open during the Market Tour before actually recovery 2818.00. Also discussed was the difficulty facing a reversal to actually close back in negative territory. It wasn’t likely. Actually, it was narrowly avoided.

Tuesday’s final two hours trended back up almost 10 points to 2821.50, but not aggressively. A short-squeeze was likelier — not from strong handed buyers, but from dumping the ballast of weak handed sellers. In its absence, overnight action is vulnerable to dipping even deeper to probe under 2808.00, or else to extending the late bounce.

Regardless, Tuesday’s 2823.00 open above all prior highs wants to be retested eventually from below. And Tuesday’s high can be probed up to 2836.00. Those upside objectives help to entrench a bullish context, which counter-intuitively enables a deeper pullback if the recovery hesitates here.

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

Monday morning’s weakness gets a benefit of the doubt that it was fulfilling the bearish WedEX. The indicator’s influence tends to be more obvious after being at all influential Friday afternoon. But continually struggling with negative territory, until the bias environment begins lapsing. is the only qualification necessary.

Isolating another probe under Thursday’s 2800.00-2802.00 lows to its own timing window meanwhile preserves Friday’s Isolation setup. It’s somewhat diluted by the extra chipping away at support, leaving less of it to defend against another downleg. And another downleg becomes likelier the longer that another upleg hasn’t yet exploited the isolated sellers.

The market often finds a way to satisfy competing interests, and Monday’s tactic was the morning’s no-bias signal. Holding a test (several times) of the 2798.00 bias-down signal and putting into play an offsetting test of the 2806.50 bias-up signal, the market left itself a trail of crumbs to find its way back up.

A similar tactic is the afternoon’s narrowly-triggered bias-up signal above 2805.75. Leaving its 2812.50 bias-up target outstanding as “unfinished business above” can help to resume the rally Tuesday. One wrinkle, though — narrow afternoon ranging between 2807.50-2809.50 broke higher post-close in reaction to GOOG’s earnings, already touching 2812.50. Not immediately finding reinforcements at Tuesday’s open would likely produce a morning of backing-and-filling.

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

Overnight drops on macro economic news had every right to extend down Friday morning. Never retesting their lows intraday, holding its ground, probing their interim high… Apparently, the bearish downside catalyst doesn’t have much strong-handed sponsorship.

Those news items had every right to have caused a durable drop. Not extending, being absorbed, retracing entirely… all suggest the market is not inclined to decline. In fact, the Isolation setup formed by maintaining a recovery back above Thursday’s 2800.00-2800.00 lows through the open. The morning’s rally created room for the afternoon’s bearish WedEX to expend selling pressure without invalidating the Isolation setup. Which it barely did.

Apart from the bearish WedEX, Friday afternoon’s decline was probably attributable to headlines of Trump’s new sex (settlement) tapes. That news item has no right to cause a durable drop. Yet, its origin hasn’t been retraced. Not, yet. That can be neutralized by Sunday night strength.

Sunday night strength could greet Monday’s open gapping up — sharply — and not interfere with the WedEX’s bearish post-open influence. WedEX’s influence is only intraday. And having been influential Friday afternoon, Monday morning’s influence is often more pronounced. Then the afternoon would be free to continue fulfilling the Isolation setup and return to Wednesday’s highs.

Both the Isolation and WedEX setup could be simultaneously influential if Monday morning were only to range narrowly sideways. Invalidating either would require the morning to trend beyond Friday’s range.

Details and other markets coverage are discussed in the post-market Wrap recording here.
THE SATURDAY REVIEW LINK WILL BE EMAILED IN THE MORNING

We knew at Wednesday’s close there was no “unfinished business above” or other attractions to higher prices in-play. The Globex session soon figured it out, too, first retesting Wednesday’s 2818.00 high and then reversing down overnight to 2806.25. The gap down’s opening bounce attacked 2813.00 and quickly reversed down to fresh lows at 2800.25. But the morning’s 2804.00 bias-down target held.

Thursday’s session was choppy, but contained easily within the open’s wide range. Bouncing from 2804.00 tested the morning’s 2811.00 bias-down signal before noon. The noon hour returned down to 2804.00 (amid Trump’s interest rate comments) and bounced again to touch the afternoon’s 2813.25 bias-up signal. The no-bias environment lapsed into another drop that reversed down to 2804.00 at the close.

2804.00 seems to be important.

Trending any lower through Friday’s open would set the tone for extending the drop either to 2791.25 or 2781.00 and 2785.00. Otherwise, rallying back up to this week’s 2818.00 highs is possible, but not required as an alternative to dropping. Only gapping up above Thursday afternoon’s 2813.25 high — after having dropped into the close — would target fresh highs. And that would require invalidating or inverting the afternoon’s bearish WedEX influence.

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

Tuesday’s buyers had not gained traction for their efforts, so only gapping up Wednesday was likely to extend the rally. Rallying anyway would be doomed to failure. An overnight dip took Wednesday’s opening action back down to Tuesday’s noon hour low before rallying. Tuesday’s high was probed twice, and held twice, but the doom was otherwise muted.

The afternoon highs were supported by the rally’s 2813.00 objective as support. The morning’s 2816.00 bias objective held as resistance, after extending to test its room for noise up to 2818.00. Buying pressure is satisfied, and the second consecutive session of testing 2816.75 has avoided recovery that would have targeted higher highs. And buyers again failed to gain traction for their intraday efforts.

None of which is a sell signal.

The WedEX comes close. It triggered passive-bearish, for having held relevant resistance without creating higher unmet targets. Thursday’s open can adjust the signal by proxy, either gapping up and extending above 2818.00, or else extending down under 2809.00. In either case, WedEX wouldn’t be influential until Friday afternoon.

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