Market Wrap

Friday morning left “unfinished business above” at 2730.75. Testing it early enough would have left the afternoon vulnerable to retesting the morning’s lows. They were retested anyway, and without the bother of rallying intraday.

Intraday selling resumed at noon, literally not until the morning’s bias environment had fully lapsed. The morning’s 2716.25 lows ultimately held an afternoon test down to 2713.75. A late bounce touched 2722.00 at the close. Sellers weren’t absorbed, despite the usual seasonally bullish influence of a 3-day holiday weekend.

Globex opens normally Sunday night and trades through Monday’s noon hour. I’ll monitor for any necessary or helpful updates.

Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO SATURDAY REVIEW THIS HOLIDAY WEEKEND.

Did Europe’s bearish attitude play any part in Thursday morning’s sizable reaction to the North Korea news? The knee-jerk reaction happened early enough that Europe’s influence could be considered. And the second push down under 2714.00 to 2706.00 might have included previously patient sellers no longer awaiting the obligatory probe above Wednesday’s 2733.00 high.

The point is that weak-handed sponsorship was bearish. Knee-jerk reactions to new headlines is already considered to be weak-handed sponsorship. Recovering the entire drop back up to its 2729.00 origin — which the balance of Thursday’s session did — may not be enough consequence, or enough reward to buyers that absorbed them.

Unfinished business above remains outstanding at Thursday afternoon’s 2732.00 bias-up target. Its attraction could help to resume the rally Friday morning, so long as the open isn’t greeted or followed by too deep of a pullback. Fresh highs are still vulnerable to reversing down, as has been the case all week. But this being a Friday, not rejecting opening strength could extend much higher 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.

Haven’t seen a “Wreversal Wednesday” in awhile. Maybe we didn’t see one this week, either. Usually the initially compelling leg is developed during the morning, before reversing more substantially into the afternoon. Wednesday’s decline developed overnight, and the entire session was spent retracing it. We’ll still give it a benefit of the doubt and expect some upside follow-through.

That is, unless Thursday’s open is weak and weakens. A weak open in itself would still be entirely capable of retracing and reversing up to extend Wednesday’s recovery. But opening lower and extending down could instead start rejecting Wednesday’s recovery.

Reversing down has room down to 2713.00-2717.00 while still being recoverable. The 3-day holiday weekend’s flat-to-higher influence makes trending any deeper difficult. But not impossible. Especially since Tuesday night’s drop suggests overnight sponsorship is both productive and bearish, and the 3-day U.S. holiday increases the Asian and European influences.

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

Just closing at the upper-end of last Monday afternoon’s 2725.00-2732.00 consolidation made follow-through Tuesday likely. So long as the overnight didn’t dip, which it didn’t. But already trending up relentlessly throughout the night added an extra requirement that fresh highs be immediate. And immediate fresh highs must immediately attract reinforcements to avoid being rejected.

Tuesday’s open only made the rally even more difficult to extend, by immediately fulfilling its 2741.50 bias-up target. And then holding it. The reaction down was immediate, as was the low it made upon attacking 2732.00.

Suddenly, nothing else about the session was immediate.

Choppiness through the afternoon touched a buy signal at 2737.50 as the bias environment began lapsing. It was the session’s last sign of strength. The balance of the session slid sharply through support after support — the afternoon’s 2730.50 bias-down signal, 2725.25-2727.25, and finally touching 2721.50.

Most of the late reaction up to 2727.25 began after coming to within 3 minutes of the cash session close. The late drop’s selling pressure was satisfied, but no relevant resistance was recovered. Extending down without delay is likely, unless Wednesday’s open were to gap up above Tuesday afternoon’s 2738.50 high.

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

Gapping up sharply both overnight and intraday is difficult to absorb, let alone to reverse back down. Sunday night’s gap up never extended, and Monday’s gap up retraced its initial probe follow-through. That’s at least a bearish bias. But it’s not a sell signal.

Almost equally important to intraday patterns is the close. And the close was still overlapping last Monday’s 2725.00-2732.00 consolidation. Tests of its lower-end had reacted down, sometimes considerably, but not durably. Closing above the consolidation’s upper-end can launch a new upleg.

Or, closing above the consolidation’s 2732.00 upper-end can trigger a obligatory blip-up that finds no reinforcements before collapsing. Or, 2732.00 has now held, and Tuesday is read to trend back down. Sunday and Monday’s rally have created room down to Friday’s 2713.00 close before any weakness can be more than noise, and signal the trend reversing down.

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