Market Wrap

[pay]About that close (How the prior session ended)
Closing at least 1 point above Tuesday’s 1058.00 high Wednesday could have signaled momentum reversing up. It was attacked, but too late to be recovered, and by a leg that originated too late to be durable. Buyers weren’t totally shut out, since the new high wasn’t retraced back under the afternoon’s 1053.50-1054.50 prior high.

Pattern points (And technical influences)
The morning’s test of 1037.00 could have been the bottom of the two-week old decline. It was the decline’s next target, and its early test reacted up sharply. Perhaps too sharply.

Reacting too aggressively to a target can undermine the bottoming effort. A better bottom could have formed by duplicating Tuesday’s session-long ranging in negative territory. There was ample room to close above Tuesday’s 1044.00 low, but under Tuesday’s 1050.00 close. Cumulative pent-up buying pressure and “ineffectual pessimism” would have propelled Thursday’s open well out of harm’s way.

Instead, Tuesday afternoon’s probe of fresh session highs already released some of the pent-up buying pressure. It could have been productive had it recovered Tuesday’s highs above 1058.00.

The 1058.00-1059.00 area is still an intraday attraction, so long as its overnight test isn’t rejected back under 1050.00. The attraction might not be rejected at all, allowing a bigger corrective bounce targeting 1073.00. Only an immediate break under 1050.00 would be credible for resuming the decline without first briefly probing the 1058.00-1059.00 area.

Bottom line (My underlying premise)
This market doesn’t like news. It likes no news. Thursday’s pre-open news (Jobless Claims) leaves the day free from any other high-profile items. Friday’s calendar is a minefield, which might inhibit late-afternoon rallying. But if Thursday morning can’t rally throughout, then the afternoon will probably contain a downleg regardless.[/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 last half-hour dip retraced an earlier attack on 1057.50. It was retraced back down to and through the afternoon’s 1049.75 low. The session’s most bullish element had been the no-bias environment’s dip and recovery from 1049.75. Its retracement neutralized that, while offering yet another bearish element.

Pattern points (And technical influences)
Tuesday’s other potentially bullish development was its late-morning probe above 1054.50. A recovery could have gained traction, except that it also probed the morning’s 1057.50 bias-down target. Suddenly, this higher level needed to maintain its recovery.

1057.50 did not maintain its recovery. Soon after, 1054.50‘s recovery was also rejected. The problem can still be cured by proxy. Gapping up at Wednesday’s open above 1054.50-1057.50 would target 1068.75 and potentially 1087.50.

Unfortunately, the last half-hour slide triggered a sell signal under 1053.00. Its close under 1051.00 confirmed that a retest of Tuesday’s 1044.00 low was underway, next targeting 1037.00-1038.00.

Bottom line (My underlying premise)
Fresh lows have already extended down to 1047.25. Bounces should meanwhile hold 1051.00 as resistance. Wednesday is a big news day, and it need not accelerate the decline’s pace. But not accelerating would be vulnerable to recovery. [/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 afternoon’s false break higher didn’t reverse down immediately. But it did reverse down eventually. And it made up for lost time. An outstanding test of the morning’s 1065.00 bias-down signal was fulfilled at the cash session’s last-minute low. It was probed by 3 ticks but recovered at the futures close.

Pattern points (And technical influences)
If Monday’s open fall to 1065.00, then an opening test of the 1075.00 area was likely first. The open probed 1075.00 by 5 points, but buyers still gained no traction as the morning’s no-bias signal was triggered. And the balance of the morning reversed into negative territory.

Then the mid-day pattern tracked another template needing to blip-up before reversing down more substantially. That started out appropriately, too, but also took a little extra time to fulfill its most bearish element.

Seeing the pattern? Sellers twice waited to trend down, making their sponsorship suspicious. While the delays did allow more longs to be trapped, the eventual drops already fulfilled that selling pressure. Trending down Tuesday to 1053.50 will need to extend down without delay, or without very much delay at all.

Otherwise, the likelier scenario would be a morning bounce up to the 1071.00 area to refuel sellers again. And having closed AT the 1065.00 target, “equilibrium” might be in-play. At least two failed trending attempts – trending, not noise – are possible Tuesday morning before trending can gain traction.

One other possible setup is the “session-long rally.” It is based on Monday’s final action having trended down, after printing the afternoon’s 1074.00 high before the last hour. So, gapping up above 1074.00 would be likely to trend higher intraday, printing its session high in the final hour (perhaps the final minutes).

Bottom line (My underlying premise)
RSIs were overbought at Monday’s opening surge, so the morning’s drop might have been sponsored by weak hands. The surge itself outlasted the opening 15 minutes of volatility, about 5 minutes too long to simply dismiss its own sponsorship as weak hands. It’s not an issue, and I don’t consider it to be unfinished business. But its 1080.25 high would be the objective if buyers gained traction. Otherwise, the decline’s resumption is still 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.

[pay]About that close (How the prior session ended)
Expiration’s influence put the market in a headlock late Friday. Firming up to fresh session highs had opened the window to a short-squeeze, but none developed. It could have launched a slingshot back down, but that never triggered either. The last 60-90 minutes just ranged narrowly – just under Thursday’s close.

Pattern points (And technical influences)
Friday’s session gapped down, and traded entirely in negative territory probing new trend lows. That’s pessimism. It closed back above the prior session’s lows. That might seem ineffectual.

But the setup doesn’t live up to the spirit of “ineffectual pessimism” since sellers weren’t really put to the test. Recovering from an afternoon probe under the morning’s lows would have been more revealing. Instead, Friday’s ranging was only that.

The reluctance to trend was likely the product of expiration’s influence. That’s quite a difference from the week’s earlier expiration influences. The wild swings, and repeatedly trending up to resistance until a last-minute reversal. Friday’s low did trend down right until reversing at noon, but that was the closest thing resembling earlier weirdness.

If the market got expiration’s influence out of its system already, then Monday morning should trade normally. The normal resolution would be to resume the decline soon after the open – whether bouncing first to the 1075.00 area, or quickly breaking under the 1065.00 area.

Otherwise, Monday morning’s character would likely duplicate Friday’s, and only range sideways. The extended ranging would become likelier to launch an attack on the 1085.00 area before resuming the decline.

Bottom line (My underlying premise)
Lower targets remain outstanding, from Friday morning’s outstanding 1060.25 bias-down target to 1053.50. Friday’s delay has increased the potential for extending even lower. A bounce into Tuesday would increase the potential even more. [/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 balance of the afternoon was most likely just to range sideways. An aggressive-looking surge to fresh afternoon highs tested 1077.50. RSIs deteriorated on its retest to leave no unfinished business above. The deterioration also created a dive to 1070.50 into the futures close.

Pattern points (And technical influences)
Closing under the two prior sessions’ 1083.50-1084.00 lower-end kept alive the potential for trending down during expiration Friday. That potential is a function of Wednesday’s post-close plunge having extended when Thursday morning’s opening 15 minutes of volatility had lapsed.

Sellers hopes have been pinned to late signals earlier in the week, too – most notably at the rejected Tuesday and Wednesday afternoon bias-up signals. Now sellers hopes my depend upon rejecting another signal.

Thursday’s 3:10-3:20 window began by probing fresh afternoon highs, and it ended without rejecting the probe. This means the next dip’s purpose would be to refuel buyers. The next dip already came, into Thursday’s close. And its post-close portion of the dip was too deep for recovery.

Friday’s open can reject the post-close portion of the dip by gapping up above 1074.00 and extending to fresh highs around 1079.00-1080.00. That would be difficult to reverse in time to signal a bias-down. Rallying and failing overnight would let expiration’s sellers retake control at the open. That, or simply ignore the bullish 3:10-3:20 signal.

Bottom line (My underlying premise)
However they do it, sellers retaking control Friday could point sharply lower. Last Monday’s oversold RSIs at 1066.25 would offer only obligatory support along the way to the 1053.00 area or lower. Buyers retaking control at the open would have potential up to the 1084.00 area before another downleg could form.[/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.