Market Wrap

The 20-point overnight drop from Friday’s 2759.00 close down to 2739.00 had bounced to attack 2748.00. Reacting down into the open blipped-up to touch the 2746.25 bias-down target’s resistance, and then plunged to attack 2720.00. Its reaction resolved down sharply, too, testing 2704.00 into the noon hour. Another bounce during the afternoon bias environment was reversed sharply to retest the morning’s low down to 2700.50.

That’s a lot of selling, even after the final hour bounced. The final hour’s bounce up to 2725.00 went out overlapping the afternoon bias environment’s 2722.00 interim high between the session’s two lows. That’s not a reversal, which it could have been. Since buyers didn’t gain traction, extending the late bounce without delay would require gapping up Tuesday. Meanwhile, the decline is likely to persist, which would also be much more credible if begun without delay or by gapping down.

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

Tuesday night’s action had warned volatility would be expanding sharply. Which it did, all the way through Thursday’s close. Thursday’s close warned that lower lows were underway, which Friday’s gap up all but rejected. But didn’t exploit, as volatility left early for the weekend.

Thursday night’s relentless rally didn’t extend Friday, but its rejection was limited to just that, not extending. It wasn’t retraced, and only hovered near Thursday’s upper-end. That makes Friday an Inside Day, not very meaningful — but what else is new for a Friday.

The close recovered 2756.00, but not 2767.00, which changes nothing about buyers still not regaining control. However, it does require sellers to prove without much delay that they’re still in control. So, not already trending down after Monday morning would start to make a retest of recent highs likelier.

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

Wednesday night’s Globex reversal setup had told us already at the open that Thursday morning would behave bearishly. The morning did trend down sharply to attack 2750.00. The balance of the session ranged widely, correcting up to 2763.50 and then making two narrower swings in the range. The pattern formed a Symmetrical Triangle.

The last downleg from 2761.50 fell to the Triangle’s uptrending support at 2753.00. And broke lower to 2748.00. A couple of similar swings ended the day, closing back above the morning’s 2750.25-2751.50 lows, testing the Triangle’s uptrending support.

That wasn’t very satisfying. Not the morning, which was extremely well done. But the afternoon sellers gained traction in a way that usually trends down aggressively through the close. Trending down was aggressive, but brief, and held the range.

Regardless, sellers are credible for resuming the decline Friday, perhaps already gapping down although that’s not required after having gained traction. Avoiding fresh afternoon lows might have suggested otherwise, that the Globex reversal setup’s bearish behavior was limited to the morning. But maybe not. Otherwise, gapping up above 2763.50 or at least quickly recovering it may be the only bullish scenario going into the weekend.

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

Wednesday was not a Wednesday Wreversal. Not intraday. The morning didn’t trend convincingly in one direction, and then reverse surprisingly and more substantially in the opposite direction. That actually describes the overnight action, which all but tested the bias-down target before reversing to the bias-up signal.

Intraday action still ranged widely. And not arbitrarily, putting into play objectives in either direction. But the objectives were left outstanding — “unfinished business” below at 2763.00 protected by natural support at 2767.00, and above at 2779.75 that was attacked to within 2 points.

Forming the sponsorship and counter-trend sponsorship to trigger widely disparate objectives, and to prevent fulfilling either, reflects an unstable market. And that’s the S&P 500. It’s not surprising for the Dow and NDX to be diverging so strongly from each other, as well. S&Ps volatility should expand sharply Thursday, whether ranging more widely or trending sharply.

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

Tuesday didn’t rally throughout, but it rallied a lot. The 2750.50 open was well off the 2735.75 low, and a post-open surge extended that quickly to 2758.50. Reacting down to 2746.25 probed a fresh post-open low, but it was also the post-open low. Rallying gradually higher into the final hour touched 2769.00.

Timing undermined both sellers and buyers. Correcting the morning’s recovery from 2764.00 by 20 points held its test of 2756.00 as support, preventing sellers from gaining traction for having probed under it. Extending higher through the afternoon held a test of 2767.00, preventing buyers from gaining traction for their efforts. More so, waiting until minutes before the final hour’s entry to actually probe above 2767.00 wouldn’t have been reliable if maintained, which it was not.

Extending higher from this pattern all but requires gapping up, preferably above 2773.50. Dipping again would have potential to hold 2756.00. But its break at this stage would likely target a retest of Monday night’s low down to 2732.00.

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