Market Wrap

Sunday night’s gap down to 2774.00 was recovered to fluctuate around Friday’s 2782.50 close up to 2786.50. Monday’s open was greeted at 2784.00, where the morning fluctuated up to 2788.50. Trending into and out of the noon hour extended to 2794.25.

The rally’s next higher objective at 2793.00 was tested, and held. The response to it wasn’t very reactive, dipping only to 2789.50, not even touching the morning’s high. (The position-squaring window did break a 2790.00 sell signal and collapse quickly to 2785.00, but that came too quickly to be predictive.) The morning’s post-open low also narrowly avoided touching Friday’s high. All of which is a degree of optimism — not excessive optimism, but enough to be wary of a coming downdraft.

Holding 2793.00 merits being wary of a coming reversal. It’s essentially the highest objective that doesn’t start making new all-time highs any likelier. There’s room for noise above it since it has actually been touched, but not much room. And there’s still a pattern of rejecting early probes above prior session’s highs.

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Thursday’s sellers had gained no traction for their efforts down to 2763.75, while expending a lot of selling pressure that left no “unfinished business below.” Another rally effort Friday was likely, and the overnight drop to 2755.75 didn’t change that.

In fact, the overnight drop facilitated Friday’s rally, by allowing the open to isolate the fresh lows to the overnight. So long as the pre-open recovery wasn’t retraced back down to Thursday’s lows, the Isolation setup was intact.

The Isolation setup performed normally, getting a choppy start off of the 2769.00 open, but soon extending to higher highs. The setup’s usual reward is to retest the origin of the leg that was eventually isolated — that’s Thursday’s 2783.25 high. It was touched at the close.

The morning’s bias setup had fulfilled the offsetting test of its 2778.50 bias-up signal during the noon hour. And the afternoon’s 2782.00 target was fulfilled. Again, no “unfinished business” was left outstanding.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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Vidi, Veni, Vanished…

Sellers waited patiently for the the week’s fourth consecutive opening surge (of one type, or another). Then they pounced on it and drove price sharply lower by 14 points, quickly. But except for one bar of errant ticks, sellers only fulfilled their downside objective. Their sponsorship disappeared almost immediately, retracing 11 points back up to the open’s high.

Sellers saw the corrective bounce, and triggered a 14-16 point drop to fresh session lows. Their downside objective was neutralized again. And their sponsorship disappeared almost immediately again, too. Two intraday bounces, two intraday drops.

Sellers saw, sacked, then split.

The pattern of distribution into the open’s fresh highs need not repeat Friday. Expending so much selling pressure Thursday without gaining traction suggests the rally will try to extend. But it won’t require any higher close, since closing Thursday in negative territory fails to confirm Wednesday’s breakout. And gapping down under Thursday afternoon’s lows would gain downside traction by proxy.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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The rally’s next higher target at 2765.00-2766.25 wasn’t yet officially in-play. That would require closing above 2743.00-2747.00, which had otherwise contained (actually, restrained) price action since its first test Monday. Breaking higher Tuesday would have rallied aggressively and substantially, but Tuesday didn’t break higher.

Tuesday did gain traction, which at least made a rally likely Wednesday, probably already starting overnight. Gapping up was corrected back under Monday-Tuesday’s highs, but recovered into an aggressive and substantial rally through Wednesday’s close. The 2765.00-2766.25 target was probed before entering the final hour. The was extended up to 2772.50 into the close.

Wednesday gained rally like Tuesday. Not already reversing down before Thursday’s open would be likely to trend higher at least Thursday morning. Unlike Tuesday, the late extension to higher highs may have fulfilled the traction. Any opening weakness shallower than 2765.00-2766.25 would likely recover.

Meanwhile, Wednesday was a breakout from the multi-session range that had formed Monday-Tuesday. A second consecutive higher close would require at least an eventual third higher close. Rejecting Wednesday’s upside traction setup through Thursday’s open or close would bearish.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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Tuesday’s price action was much more volatile than Monday. Yet they both developed around 2743.00-2747.00. This range is either the temporary probe above prior highs, or else the delayed launch to another upleg. Each probed a fresh morning high before reacting down to probe under the open. And each reaction was largely recovered to attack the morning’s high.

Tuesday’s close was above 2743.00-2747.00, and traction was gained through the bias environment exit and final hour entry. The proxy window undermined the upside traction, but didn’t invalidate it. So, resolving down should be obvious almost immediately Wednesday, before Tuesday’s traction can attract new sponsorship. Otherwise, not extending down would likely produce an aggressive and substantial rally — the same rally Tuesday afternoon could have produced.

Meanwhile, Monday and Tuesday’s sideways range has formed a multi-session range. Closing beyond either end of its range would be a breakout. Closing lower would have support back down to 2736.00. Breaking higher could become a two-day affair.

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