Market Wrap

Friday’s expiration started out with sponsorship. Perhaps it wasn’t obvious from the range’s measurements, but a specific upside limit was calculable, and its test produced a steep, deep reaction down. That’s the expression of opinion, in action.

Mid-morning choppiness tried to rescue the market from triggering bias-down. The rescue was almost a success, until it botched the operation entirely by plunging too late to trigger the bias. Its target was met to within 3 ticks anyway, so selling pressure was satisfied.

The balance of the session only ranged sideways, choppily. Lower highs and almost lower lows complied in a minimal sense with the bearish WedEX. There certainly was no afternoon rally, bounces failed, and the session ended at afternoon lows. So, a more obvious post-open bearish influence is likely Monday morning, regardless of the opening print.

Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO SATURDAY REVIEW THIS WEEKEND. CHARTROOM WILL RE-OPEN WITH GLOBEX SUNDAY.

All but one of Thursday’s signals attracted reinforcements to exceed their 3-4 minute initial extremes. The exception was the post-open 7-point plunge that probed overnight lows down to 2713.50. Too much, too soon — and during the wrong timing window — to attract reinforcements. The trapped shorts were squeezed back up.

This began a session that offered multiple more instances of weak-handed buying. Their impatience was revealed in temporary steep slopes and ill-timed tests of resistance. The jury is still out on one possible instance of weak-handed selling.

First, a sampling of weak-handed buyers. Holding a test of the morning’s bias-down signal already neutralized upside momentum by fulfilling its offsetting test of the 2725.75 bias-up signal in time to trigger it, but not. The unlikely morning rally that would be doomed to failure if tried, which tried to its fullest potential at 2732.00, and failed. Intraday tests of downtrending pivotal resistance (see the chart and video) that produced peaks.

Weak-handed selling is possible in the afternoon’s no-bias trending under the 2721.50 bias-down signal. It was doomed to failure like the morning’s extended rally, unless the 2715.00 bias-down target maintained a break. And it broke, with 4 points of buffer down to 2711.00, but was still recovered. The recovery neutralized its attraction above at the bias-down signal retracement, but no more. No reward for the recovery, so no resolution yet.

Meanwhile, Monday afternoon’s prior high held its test Thursday, after Wednesday peaked upon testing the “lower prior highs” of its structure. Reversing down to the interim low held, so I can’t yet say that the bounce’s failure reversed the trend down. And might not say it all, unless and until 2717.25 and 2711.00 break lower.

Details and other markets coverage are discussed in the post-market Wrap recording here.
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When is a rally not a rally? Trick question — by any other name, a rally is a rally is a rally. But its sponsorship can vary, leading to entirely different resolutions.

Wednesday’s rally up to 2727.25 didn’t prove that its sponsorship was strong-handed. The consequence would be to retrace the rally entirely back to and likely through its origin at Tuesday’s ~2701.00. Wednesday’s opening surge was the reaction to pre-open defensive posturing, the morning couldn’t trigger bias-up, the afternoon’s bias-up target was met during the noon hour, and then not extended when the bias-up environment ended. All behaviors of weak hands.

And it wasn’t just that weak hands expended energy when they couldn’t gain traction for it, or that they fulfilled their buying pressure. The weak-handed rally also held a test of resistance at 2725.00, essentially filling the gap back to Monday’s close by testing the lower-end of the structure containing it.

The upper-end of that structure is essentially 2732.00, and its recovery through Thursday’s open would accomplish by proxy what Wednesday’s close did not. Similarly, it would serve by proxy to signal a bullish WedEX, which is otherwise bearish for having held the test of resistance.

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

Tuesday’s action developed overnight, and then through the open, and then it stopped. “Unfinished business below” at 2721.50 was neutralized by fresh lows before Europe’s opens. (Before, i.e. defensive posturing.) Another drop, larger and steeper, fell to 2712.50 before the open. And that was extended to 2703.25 through the first half-hour.

That’s a lot of momentum, a lot of ground covered, and a lot of supports broken. But that was also the end of the downside momentum. No upside momentum replaced it, so several wide swings defined a 11-12 point range that gradually pierced lower and lower lows down to 2700.50.

The last half-hour’s bounce to 2711.00-2712.00 ended at the range’s last relative high. It had become too late anyway to recover anything predictive, or to offset that the range had gained no traction either way.

Gapping down under the afternoon’s 2701.00 low would be credible for probing fresh lows, to 2695.00-2696.00 and possibly to 2689.00 or 2682.00. Gapping up above the morning’s 2715.50 high would be credible for bouncing intraday.

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

Wednesday and Thursday’s consecutive similar sessions gave us clues to help react during Friday’s session. Both sessions had gapped up, eventually trending up sharply, into an after consolidation at a next higher objective. Another sustained intraday rally became unlikely.

Now the next two consecutive sessions have behaved similarly to each other. Rallying through the open and extending to their bias-up targets, then reversing into negative territory through the afternoon. Another failed morning rally is unlikely.

But a failed probe lower is possible, like after fulfilling “unfinished business below” at Monday afternoon’s 2721.50 bias-down target. Extending lower is possible, too, like probing Thursday afternoon’s low under 2713.00. Another rally leg is also possible, but a corrective bounce could be limited to 2737.50.

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