Market Wrap

[pay]About that close (How the prior session ended)
Thursday’s close dipped 3 points to end the cash session back at the afternoon’s 1099.00 bias-down signal. It wasn’t recovered coming out of the afternoon’s bias timing window, or coming out of the cash session (in fact, the futures close extended down to 1097.00). And Friday and Wednesday’s prior highs weren’t recovered through the close. Buyers gained no traction.

Pattern points (And technical influences)
Low volume Thursday undermined the pre-open rally. That much was obvious before the rally ever started. But volume also prevented the morning’s bias-up environment from retesting the pre-open’s overbought RSIs. That was a surprise.

And having failed one bias environment to retest the pre-open highs, the noon hour or afternoon windows became appropriate to rally. They did not. Bearish, or low volume? Perhaps that was answered when the afternoon’s bias-down signal went unfulfilled.

Overbought RSIs at Thursday’s 1107.00 pre-open high are likely to be retested. The 1106.00 gap  back to Thursday’s open, too. It would be as likely to push back down – because similar to Wednesday,  a massive intraday recovery attempt closed back under the prior session’s high.

Rallying strongly enough and early enough Friday  would attract sellers to exit or short into the weekend, and the session could end in steep decline. Only firming at the open wouldn’t be as attractive to sellers, and would be less vulnerable to reversing down.

An overnight dip should at least fulfill Thursday afternoon’s 1093.50 bias-down target. It should at most fulfill the target. Any lower would come dangerously close to breaking support, and reversing momentum down into the weekend.

Bottom line (My underlying premise)
Thursday’s last-minute 3-point drop from 1102.00 fell 2 points more into the futures close. And then another 2 points after the Globex open. Rejecting another recovery attempt would find support well chipped away.[/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.

[pay]About that close (How the prior session ended)
The FOMC reaction’s recovery had fulfilled its 1101.00 target. A dip to its 1099.75 pullback limit had ended within its 2-3 minute allotted time frame. It recovered quickly enough, too, but further trending was unlikely with volume thinning. A drop faced the same challenge, but it was overcome to attack afternoon’s lows.

Pattern points (And technical influences)
Tuesday’s session-long decline didn’t damage the chart much. Wednesday’s recovery didn’t improve it. Tuesday’s intraday high was probed and held as resistance. The gap back to Friday’s 1103.25 close was essentially filled within 1-2 ticks.

Buyers expended a lot of energy. Overnight probes under Tuesday’s lows didn’t just fail to gain traction – they were rejected by recovering back above Tuesday’s highs. Failing to close above Tuesday’s highs means that buyers didn’t gain any traction for their efforts. And that was some effort.

Wednesday afternoon’s slowing volume limited the FOMC reaction’s recovery. Volume won’t slow Thursday – it will remain constant among those participating at its start. Trending will be possible. Trending back up to prior highs, or back down to prior lows.

Bottom line (My underlying premise)
Rosh Hashanah holiday sessions don’t normally trend, so trending is unlikely. Much easier is retracing prior price action. There’s not a lot above to retrace, and plenty below. Meanwhile, if pre-open Jobless Claims doesn’t get the ball rolling in one direction or the other, then the balance of the morning would be unlikely to trend, too.[/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.

[pay]About that close (How the prior session ended)
Tuesday’s session-long decline fulfilled its potential for the session low to print during the last hour. Twice. A 3-1/2 point bounce from the 1090.25 3:00 low soon cratered to 1089.75 before the cash session close. The session ended under all prior intraday lows.

Pattern points (And technical influences)
The open gapped down, and the entire session developed in negative territory. The afternoon maintained a probe of fresh lows, closing under the prior session’s low. Yet, the last hour’s lows barely pierced Thursday’s highs as support.

And the prior highs pierced by Tuesday’s lows weren’t even regular session – they printed above Tuesday’s 1089.25 intraday high. That’s optimism. So, there’s probably more pessimism to come. How much more pessimism, and when, is key.

A dip under 1089.00 could extend down to 1085.50 before sellers started gaining traction for a much bigger slide. Recovering from an immediate dip could launch a rally targeting 1100.00 or 1105.00. Rallying first to either target Wednesday would refuel sellers for another downleg attempt.

Volatility might hibernate temporarily ahead of Wednesday afternoon’s Beige Book. The reaction might be exacerbated by the impending Rosh Hashanah holiday that begins at sundown, pushing a lot of trading forward as many traders try to leave early.

Bottom line (My underlying premise)
Sellers had marginalized since last Wednesday. Tuesday’s pessimism doesn’t mean sellers have yet returned. But any failure to hold support or to recover resistance should bring out more signs of sellers retaking control – if they intend to, 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.

[pay]About that close (How the prior session ended)
Friday’s patterns targeting a test of 1105.00 were fulfilled early Sunday night. It was probed repeatedly, each time dipping back under Friday’s prior highs. Overall, the holiday’s Globex session ranged choppily around 1105.00. Its 1-point gain to 1104.50 gained no traction since that was flat with Friday’s cash session high. There is no “new Globex trend extreme,” overbought RSIs, higher objectives or other unfinished business above.

Pattern points (And technical influences)
Most of Monday’s holiday Globex fluctuations around 1105.00 actually hovered above 1105.00. Failing to extend a probe of higher highs is one thing, but failing to extend so much probing is another. The lack of improvement is underscored by the Nikkei’s strong rally, which had a greater effect in Europe. Clearly other markets played catch-up to S&Ps, without creating a premium to attract S&Ps higher.

More optimism would have been surprising. Although Friday did avoid closing above its 1100.00 opening print (closing AT it would have been bearish on a day that gapped up above prior highs), it was avoided thanks only to firming in the last 20 minutes. The morning’s high remained intact through Friday’s close, and now also through Monday’s Globex close.

This week could still extend higher. Recovering 1105.00 would next target an attack on August’s highs up to 1118.00-1119.00. Gapping down Tuesday under 1099.00 would reject all of the price action above it, including the holiday Globex session’s probing above 1105.00. Friday afternoon’s low was 1099.00, and Friday’s close rallied, so gapping down under 1099.00 would also signal momentum reversing down session-long.

Bottom line (My underlying premise)
1037.00-1038.00 had been the last downleg’s target. Last week’s drops retesting the area stopped optimistically short of forming a durable bottom. Regardless of the interim rally’s size and duration, it is still only a corrective bounce. The rally made the most of sellers being marginalized since last Wednesday morning. If they haven’t returned by Tuesday afternoon, then this corrective bounce would extend.[/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.

[pay]About that close (How the prior session ended)
1-minute RSI had almost diverged positively into the noon hour’s dive to 1082.00. It wasn’t much, but it was a lot for such an otherwise listless day. Buy signals started triggering above 1083.50, renewing momentum to the morning’s outstanding 1089.00 bias-up target. The cash session’s high touched it, before post-close firming probed it.

Pattern points (And technical influences)
Exceeding the 1089.00 target through the cash session close would have extended its pattern. (It wasn’t probed until after the close.) Thursday’s close may have been equilibrium. Gapping under afternoon’s 1084.50 prior low may be the only way to avoid 2-3 trending attempts in the morning, that aren’t not noise. The first 1-2 attempts would fail, the last would gain traction.

Gapping under afternoon’s 1084.50 prior low would trigger a session-long decline. Its minimum objective would be Wednesday afternoon’s 1075.00 low, with potential to 1052.00.

Sellers became marginalized Wednesday morning by failing then to retake control. It’s possible that buyers exploited this enough in the interim to attract sellers back. Fulfilling the 1092.00 1089.00 target left no unfinished business above to inhibit or rescue a negative reaction.

Rallying further into the weekend would have potential to probe multi-week highs at 1099.00, perhaps even 1105.00. Extending much higher at all Friday would be difficult, as participation thins out ahead of the three-day holiday weekend.

Bottom line (My underlying premise)
Sellers might be attracted by a surprisingly negative Employment Report – which is to say, an Employment Report that isn’t surprisingly positive like several recent items. Otherwise, the morning’s reaction could be the session’s only action. Friday morning bias signals tend to persist through into the afternoon. And a no-bias morning before a holiday weekend might as well be no-bias through the close.[/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.