Market Wrap

I’m unavailable for Monday’s final hour, so the Market Wrap was held early. At that time, the morning’s 2749.25 high remained intact. So did resistance at the afternoon’s 2747.00 bias-up signal. But neither was yet rejected.

The open’s surge had been retraced to the open, which held its test. Two tests, actually. Its recovery to 2747.00 was corrected but not reversed. And 2747.00 was being retested into the final hour. But it wasn’t (yet) recovered.

Closing beyond either end of 2743.00-2747.00 would be likely to extend in that direction, but still needing confirmation on Tuesday. Closing beyond either of the 2743.00-2747.00 range would still be vulnerable through Tuesday’s open to reverse sharply.

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

Friday’s gap-and-run extended substantially, fulfilling all upside objectives. That included probing above 2733.00, which was the next higher objective above 2725.25-2727.25. Friday morning’s bias signal also persisted through the noon hour. And although the afternoon’s 2735.00 bias-up signal triggered, its 2-tick margin was suspicious enough before also being retraced entirely within a couple of minutes.

So, there is no “unfinished business above.” No new unfinished business below was created, but Thursday’s oversold RSIs at 2699.75 remains outstanding.

Departing from the common Friday afternoon template, the trending session ended in retracement. Not extending earlier trending would be more typical, as typical as extending higher, in either case being unlikely to attract counter-trend sponsorship. But sellers made an effort by exiting the bias environment under the noon hour highs despite an interim probe of fresh highs.

Sellers gained traction by probing fresh afternoon lows through the 3:10-3:20 proxy window. But that was where the reaction down ended. The close bounced back up to 2733.00. The break had potential for extending to 2723.50-2724.25, which isn’t required, but now represents the range for noise below.

Details and other markets coverage are discussed in the post-market Wrap recording here.
SATURDAY REVIEW STARTS AT 9:30 ET, ITS LINK WILL BE EMAILED IN THE MORNING.

Thursday’s open didn’t gap and run like the prior two sessions (making it likelier Friday). It’s open did gap — not as the resolution to or the product of overnight trending, but as a late pre-open breakout. Such setups tend to be retraced back to their origin, and a relevant portion of Thursday’s was retraced, albeit not entirely before resolving down.

Closing back under the morning’s low decisively would have indicated the corrective bounce from Tuesday afternoon is resolving down. Thursday’s close was still overlapping the morning’s low, so we’re not sure the trend is yet reversing down. But the burden of proof was on buyers after probing the morning’s low, and overlapping it doesn’t equate to recovering it.

Regardless of gapping open or not, initial strength Friday would be credible for extending higher intraday. That would mean Thursday was backing-and-filing, and potentially refueling buyers. Oversold RSIs at Thursday’s low may make that difficult unless neutralized already by a temporary overnight dip.

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

So, is Wednesday’s bounce not a temporary correction? It avoided closing back under 2715.00, which was the minimum requirement to signal that upside momentum had lapsed. No “unfinished business above” was left outstanding, as the afternoon’s 2727.25 bias-up target contained session highs. But reactions didn’t extend back under 2725.25 into the final hour or during the proxy window, so breaking later to its 2721.50 target was only noise.

But the late break did serve to chip away at support around 2721.50. It’s not any likelier to be retested Thursday, but its intraday retest is now less likely to hold. Still, its break has room down to 2711.00 before signaling the trend reversing back down.

Probing Wednesday’s 2729.25 high overnight but greeting Thursday’s open back under the initial overnight lows would also signal the trend reversing back down. Preferably, fresh highs would first probe above 2733.00.

Regardless, keep in mind that this week’s action now contains multiple occurrences of gapping and running in the gap’s direction. Gapping significantly and running substantially. Being self-contained by fulfilling any objectives and leaving no “unfinished business” outstanding. So, gapping open in either direction Thursday would be likely to extend in that direction — even up. Thursday isn’t any likelier to gap and run, but not doing so would make Friday likely to repeat the pattern.

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

Is that a new downtrend you’ve got there, or are you just happy to get sellers out of the way?

The 3-day holiday weekend ended more abruptly than the calendar had suggested. May 14-22’s Double Top already had retraced its 2700.00 interim low too deeply to rely on the rally resuming. Corrective bounces testing and retesting the 2730.00 area never regained momentum. And Friday’s inside day didn’t change matters. So, Tuesday’s gap down to 2700.00  had only two choices: Extend down, or else bounce before extending down.

It was a little of each, as the open’s 2697.00 low was recovered to test “higher prior lows” up to 2709.50 before retracing entirely. The 2690.00 overnight low was soon retested by a plunge into the noon hour that got to 2676.50. Bouncing to 2691.50 was retraced back to the low, and then recovered back up to 2691.50 into the close.

A lot of selling pressure was satisfied below. Renewing the morning’s bias-down signal under 2708.00 had put into play 2679.00-2683.50. It didn’t require an intraday retest. So, is its quick test the sign of a correction wanting to resolve up soon? A higher close Tuesday might have suggested as much, but the decline’s momentum remains intact.

Gapping up — or down — by enough margin Wednesday could reverse or extend the decline, respectively. Any strength shallower than 2715.00 is likely to resolve down. Meanwhile, since Tuesday’s sellers gained no traction for their efforts, the 2675.00-2676.00 lows need to break Wednesday before suggesting buyers are marginalized.

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