Market Wrap

[pay]At the close (How the prior session ended)
The holiday’s Globex session was choppy, but still contained within a narrow range. No critical level was tested, other than a dip that probed Friday’s 1074.75 equivalent cash session close. The range only narrowed overnight, until a 2:00am lift-off from 1078.00 up to 1086.50.

Pattern points (And technical influences)
The overnight surge is probing Feb 4’s 1085.00 gap open. Unless the recovery fails to hold 1083.00 through the open, this puts into play 1093.00-1095.00.

Momentum doesn’t reverse down so long as 1075.00 holds as support. The overnight high’s retest is likely in any case, unless it were all ignored by opening essentially unchanged from Friday’s 1079.00 close.

Bottom line (My underlying premise)
The default du jour – or “ti̱s i̱méras” which is the more fitting Greek translation – couldn’t have a higher profile. Rather than sell-off until resolution is at hand, the market is rallying in expectation of the crisis being resolved. You don’t need a liberal arts education to recognize how this classic tragedy ends. Meanwhile, there appears to be one more adventure ahead.[/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]At the close (How the prior session ended)
Friday last hour dip stopped 2 ticks short of 1067.50, which had defined the session’s mid-point. The optimism wasn’t too excessive to prevent an 11-point surge into the close, as participants clearly expected positive developments this weekend. That extra optimism might prove to be overdone.

Thursday’s 1076.50 close was under prior highs, so the gap back up to it didn’t require being filled. The gap would have required being filled if Friday had closed back above Thursday afternoon’s 1073.75 lows.

The first half of Friday’s last half-hour surge filled the gap back up to Thursday’s close. Now Its attraction has been neutralized, before it could be relied upon to attract price higher after the weekend.

Pattern points (And technical influences)
The other half of Friday’s last half-hour surge retested Thursday evening’s 1079.75 high within 2 ticks. It, too, didn’t required no retest. And that was just futures – the cash session’s equivalent close was 1075.00. Since this discount was part of trending to a new intraday extreme, it is going to try attracting price down to it, undermining Friday’s late rally.

Friday’s last half-hour 11-point surge from 1068.00 had threatened to be a plunge to new session lows. The last untested support held its test at 1069.00, below which nothing remains. This may still be case after good news over the weekend elicits a knee-jerk reaction among buyers – and if there’s no good news over the weekend at all.

Bottom line (My underlying premise)
Every session last week overlapped the prior Friday’s range. And all but one of those sessions printed a fresh high. This is not basing, at least not basing capable of launching a durable rally. But a resumption of the decline at this stage requires either failing a brief probe of more fresh highs into the low 1080‘s, or gapping down under Friday’s 1060.00 low.

Bias parameters are available for Sunday night’s Globex session. New parameters will be published after its close Monday. I’ll update the Globex action in between.[/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]At the close (How the prior session ended)
As if not already clear from the mid-morning surge, sellers were absorbed. The noon hour’s narrow range was exceeded after the 1:20 timing window, and the afternoon’s 1075.75 bias-up signal was still being tested at 1:30. Sellers just weren’t going to get anything done.

Indeed, the balance of the afternoon continued ranging sideways at the higher levels, even through the bias environment lapsing. So much energy had been expended to tread water at the highs, without sellers scoring any hits, that higher highs became almost a requirement.

Fresh highs at 1078.75-1079.00 into the last hour could have been rejected in time to launch a steep and deep drop through the bottom of the hour. But the last hour only maintained the range.

Pattern points (And technical influences)
The afternoon reflected no significant selling pressure – no dip, no failed probe of higher highs. This setup all but assures at least a probe of higher highs yet to come. In fact, 1078.75-1079.00 was probed an hour after the close.

It is significant that the cash session did not do this. Closing above the week’s prior highs would have entered Friday at the lower-end of a new trading. Opening Friday back under Thursday morning’s 1075.00 high would signal momentum reversing down, and not just a corrective dip.

The open’s significant selling was a warning shot across the bow. Whether it is revisited Friday or next week is irrelevant. Thursday’s low should be revisited soon, along with last Friday’s low, so long as a significant rally isn’t squeezed in before the weekend. And no matter the probability for resuming the decline, the impending holiday’s three-day illiquidity does insert a wild card into the equation.

Bottom line (My underlying premise)
Several econ reports have been delayed due to weather. The calendar already had its potholes. But this shifting lineup makes any initial trending even more vulnerable. The vulnerability would be to accelerating to the downside if the cash session opens back under Thursday morning’s high. Otherwise, new highs after the open could still be rejected. But this being a Friday, the morning’s bias environment is likely to persist into the afternoon. [/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]At the close (How the prior session ended)
The afternoon’s 1071.50 bias-up target fulfilled buying pressure, also neutralizing the objective of probing fresh session highs. The reaction trended down into the close, testing 1063.25 as support. That was the morning’s bias-down signal, which had triggered. Its recovery into the noon hour had confirmed the buy signal whose objective was fresh session highs.

That low was low enough, relative to the afternoon’s prior lows, to form the basis of sellers gaining traction. A close under 1063.25 would have made Thursday’s open likely to decline. Instead, any modest initial strength is likely to be absorbed, but a rally could still gain traction on a strong enough open.

Pattern points (And technical influences)
Tuesday’s equilibrium close predicted a choppy widely-ranging session that would try trending Wednesday, without gaining traction in either direction. Wednesday’s close was nearly unchanged, despite probing relevant prior highs and lows.

There is no new pattern entering Thursday’s session, only the momentum of Wednesday afternoon’s decline. And its opening resolution is likely to be Thursday’s ultimate resolution. So, the first half-hour’s trending – if any – should define the session’s underlying theme.

Bottom line (My underlying premise)
Jobless Claims will be influential, along with any developments regarding Greece’s debt. If the impact of either is only fleeting, then time will have grown too short ahead of the three-day holiday weekend for any trending this week. [/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]At the close (How the prior session ended)
Once again I find myself surprised at the temerity of a sell-off into the close. Despite coming from above Monday’s highs at 1072.25, Tuesday’s late decline barely probed under the morning and overnight highs to touch 1065.25. That was the morning’s highs second test as support – bordering on overkill if the market is trying to say the support is capable of launching another rally leg.

Pattern points (And technical influences)
The noon hour’s spike down was also surprisingly brief. It’s not that the dip was brief, but that that the dip’s brevity wasn’t due to a rally trying to get underway. Instead, the dip’s low was later probed by fresh afternoon lows.

The afternoon’s interim bounce retraced 61.8% of the decline from session highs, qualifying as a correction that is ready to start a new downleg. But that wasn’t attempted until Tuesday’s final minutes, which is a little late to be predictive. And that late attempt measured 61.8% of the way back to session lows. Meanwhile, the close was back under the morning’s highs, indicating that buyers failed to gain traction.

It all smacks of equilibrium, which suggests trending attempts will be tried in either direction, and that the first attempts will fail. Tuesday afternoon was spent treading water above the morning’s highs, forming “ineffectual optimism.” This also undermines the recovery’s credibility, but also doesn’t prevent a rally attempt. A failed attempt, unless it starts by gapping up above Tuesday afternoon’s highs.

Bottom line (My underlying premise)
Extending higher after Tuesday’s noon hour would have been likely to extend higher through Wednesday morning, too. The impending three-day holiday weekend would have made counter-trend sponsorship difficult to generate. This was just the latest Tuesday’s three failed rally attempts. Buyers repeatedly failed to exploit the opportunity whenever it appeared. The message seems clear that a rally might be attempted, but it won’t last long.[/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.