Market Wrap

Friday morning’s test of its 2654.00 objective was isolated during the bias environment. That made it difficult if not also unlikely to be broken. The next timing window capable of breaking it would be the final hour. So, after bouncing to 2668.00, the proxy window’s probe of fresh session lows had the opportunity to break lower. Despite testing 2645.00, the last half-hour bounced back above 2654.00 to 2659.00.

Closing under 2654.00 would have qualified as a hold-short, even over the weekend. The air pocket under Thursday’s lows had been probed down to the structure containing Wednesday’s close. The next probe lower should find another air pocket with only obligatory support at 2620.00, 2604.00 and maybe 2584.00. Then lower.

There’s also a path higher. Considering the steady flow of negative news items being absorbed, a positive development could be a very bullish catalyst. We’ll discuss that during the Saturday Review.

Details and other markets coverage are discussed in the post-market Wrap recording here.
THE LINK TO THIS WEEKEND’S 9:30am ET SATURDAY REVIEW WILL BE SENT IN THE MORNING.

Did Thursday thread the needle? Gapping up was the only path higher intraday. Indeed, the open gapped up above Wednesday afternoon’s 2655.00 bias environment high to form a “session-long rally” setup. But the next higher objective was likely to hold at only 2672.00 — kind of close for a session about to trend up.

In fact, 2672.00 held three intraday tests, including a very late surge to 2675.00 that nevertheless reacted down to 2662.50 through the close. But by then, the final hour had fulfilled its requirement to probe the prior timing window’s high, barely fulfilling the session-long rally setup. That final hour surge had come too late for buyers to gain traction for their efforts.

The morning following a session-long rally tends to extend higher — that doesn’t prevent a morning uptrend from reversing down into the close. Meanwhile, the morning after not gaining traction tends not to extend its rally without gapping up — probing higher highs anyway would be doomed to failure. So, higher highs Friday morning are likely. And they’re likely to be reversed down sharply if not begun by gapping up.

If the likelihood of probing higher is avoided altogether, then that would probably be due to trending down already overnight. So much of the price action under Thursday’s range has been so thoroughly tested that any probe under it could hit a deep air pocket and collapse. An afternoon reversal down from fresh highs would be vulnerable to that, anyway.

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

Tea break’s over? Tuesday night’s slide under intraday lows had been retraced back within Tuesday’s range before the open. That isolation held Wednesday’s session within Tuesday’s range. This, after Tuesday had also only ranged, choppily around Monday’s highs. Two consecutive sessions contained essentially within 2640.00-2662.00.

Those two consecutive sessions don’t account for the overnight dips. Tuesday night’s got down to 2626.00. Its retest is likely Thursday — if not Wednesday night — unless Wednesday night rallies to produce a gap up Thursday. Buyers gained no traction Wednesday, so rallying Thursday all but requires gapping up, at least above 2555.00.

Retracing to Tuesday night’s 2626.00 low is really resuming the decline. Obligatory support at the gap back down to Friday’s 2604.00 close would likely be only temporary, as would any bounce from testing Friday’s 2684.50 low. Otherwise, rallying overnight and Wednesday morning could be limited to 2672.00 or else 2715.00-2722.00.

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

Optimism was alive and well Tuesday. Overnight action waited only for the Chinese Premier’s speech before starting to recover all of Monday afternoon’s 43-point collapse. Monday afternoon’s high and Friday morning’s post-open high resisted the overnight recovery, and Tuesday morning probed higher. A deep 27-point reversal was isolated to the noon hour and then recovered to even higher highs.

But the session didn’t trend. Zukerberg’s late appearance inhibited sponsorship from actually trending higher. Optimism prevented trending back down. But the lack of trending does not equate to basing. Simply hovering throughout the day is no likelier to resolve up than to resolve down.

The rally gained no traction for its efforts Tuesday. Extending the rally Wednesday would require gapping up, probably above last Thursday’s 2672.00 highs. Meanwhile, the pattern remains vulnerable overnight to retracing Monday night’s recovery of its afternoon decline, and to greeting Wednesday’s open back at Monday afternoon’s lows.

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

Monday’s 83-point round-trip rallied 40 points off of the open’s 2614.00 low up to 2654.00, then back down to 2610.00 at the close. As usual, they fell faster than they rose: the afternoon retracement lasted only two hours. The last-minute low overlapped Friday’s last-minute high be almost 2 points — hardly what the market seemed to be considering at its session high.

All of which developed in positive territory. That’s a lot of selling pressure to expend without gaining traction for the effort.

However, the gap back down to Friday’s 2603.00-2606.00 close wasn’t even attacked, let alone filled. So much of the afternoon drop developed so late, that I don’t view the close as “stopping optimistically short” of its potential. Regardless of the complete post-open retracement, the burden of proof is on sellers.

Already extending down at Tuesday’s open would be likely to persist through the morning. Friday’s decline could even resume. Otherwise, China and Facebook may keep price action constricted and inhibited.

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