Market Wrap

I’m away from the screens one hour early today, so we held an early Market Wrap (linked below)…

Better late than never? Wednesday’s one or two rubber band stretches didn’t resolve Wednesday afternoon or through Thursday’s open. The balance of the morning and the afternoon compensated for the delay. And then some, reversing the morning’s dip from 2609.50 to attack 2650.00.

Of course, the last bit of that was enabled by gentler comments by Trump toward AMZN, sparking a Tech rally. But rewarding the rubber band stretches was already pretty productive.

The delayed rally has also left “unfinished business below.” The morning’s 2625.25 bias-up signal requires being retraced. And so does the afternoon’s 2639.75 bias-up signal. That could be done by Thursday’s close, as Friday Factors make trending more difficult.

Regardless of Thursday’s lower-volume rally, there’s no requirement for its failure or retracement intraday. And there’s plenty of room below to expend selling pressure without it damaging the chart.

• Details and other markets coverage are discussed in the post-market Wrap recording here.
• THERE IS NO SATURDAY REVIEW THIS WEEKEND… HAVE A HAPPY EASTER AND HAPPY PASSOVER! CHARTROOM WILL RE-OPEN SUNDAY NIGHT.
  

Overnight choppiness extended into Wednesday morning, forming a range. It was a wide range enough to represent divergent opinions, and not just noise. Even trending attempts were contained within the range.

The afternoon ranged more narrowly, and didn’t attempt trending in either direction.Breaking the afternoon’s narrow range one minute after entering the final hour was too late to be strong-handed sponsorship. Indeed, the break was brief. Not shallow, but brief. And false. It was retraced entirely, as would be expected of a late break from a directionless range.

But the retracement never actually reversed direction. The range — essentially, Wednesday’s middle —  acted as resistance. Which on its own isn’t bearish. But the morning also recovered from a deep dip, without yet reversing up.

Potentially, these two failed dips are pessimism that will prove bullish from a contrarian perspective. That is, if they’re exploited early Thursday, as was already acceptable Wednesday afternoon. Delaying a rally for much longer would likely be because the decline has already resumed into the long weekend.

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

Score one for the anti-bias forces Tuesday. Two, actually. No, wait, one. Or none.

The morning’s rejection of both bias-up parameters 2663.25 and 2671.00 had put into play offsetting tests of both bias-down parameters 2648.75 and 2637.75. The morning met neither before bouncing to fresh post-open highs at 2675.50.

The afternoon triggered no-bias without putting into play any objective. But then its 2663.25 bias-down signal broke, too late to trigger, which is “no-bias trending” that requires being retraced. It wasn’t.

So, both bias setups failed.

Except the afternoon’s no-bias trending extended down to test the morning’s 2648.75 bias-down signal and its 2637.75 bias-down target. Also, exiting the afternoon bias environment under its 2655.00 bias-down target invalidated the no-bias trending and its required retracement.

So, both setups… excused?

The afternoon drop extended down sharply to 2598.75 before I had to leave the screens early for the day. I was skeptical at the lateness of breaking under 2655.00, but that now seems more than a little moot. Closing back under Friday afternoon’s 2650.00 high invalidates the next higher objective it had put into play at 2691.00 — which was already undermined by still overlapping 2658.50 at Monday’s close.

The holiday weekend’s bullish influence doesn’t become effective until Wednesday afternoon, so there’s still a brief window that could see sellers do more damage. And that’s assuming the bullish influence isn’t twisted like the two bias setups described above.

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

Monday’s gap up to 2630.00 had bitten off more than it could chew. Its eyes were wider than its stomach. It flew too close to the sun. However we characterize it, Monday’s open extended the overnight rally only briefly before reversing down sharply through the morning.

Whatever it was, the open’s brief strength wasn’t “ineffectual optimism.” The overnight rally failed its attempt to extend, but each of the open’s relevant timing windows held up. The morning’s reversal originated after the 10:15 bias timing window.

Maintaining the open’s recovery above Friday morning’s low did form a sort of Isolation setup. So, the subsequent dip began from a position of strength. Recovering before noon would have been optimal, but at least the drop stopped when the bias environment began lapsing. In either case, its sponsorship wasn’t gaining reinforcements. Regardless, the drop was recovered, and then the morning’s rally resumed. Its minimum reward for having absorbed the dip was to retest Friday afternoon’s ~2650.00 high.

The afternoon rally gained traction first by exiting the bias environment above the noon hour’s high. Entering the final hour above the bias environment high confirmed, albeit still overlapping. Clarification arrived by extending above ~2650.00 through the 3:10-3:20 proxy window. Immediate follow-through already tested Friday morning’s 2658.50 high without closing above it. But unless rejected immediately Tuesday back under ~2650.00, the next higher objective in-play is 2691.50.

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

It’s gonna be a loooong weekend. Although the 1987-style crash analog is already broken, one of its elements is still tracking. Nearly two weeks of decline aren’t yet even attacking the first downleg’s lows or probing below them, so a capitulation session will encounter more support. But multi-session trending into the weekend typically extends coming out of the weekend.

Rejecting the isolation setup during the open instead of only invalidating it would have been as bearish as the setup is otherwise bullish. Notwithstanding the last two invalidated isolation setups have resolved down sharply.

Meanwhile, the overnight “failed Descending Triangle” that avoided resolving down yet during the opening 15 minutes has resolved down following the afternoon bias environment. If that’s connected, then look out below Sunday night because the pattern’s resolution tends to be substantial.

Friday’s last downleg ultimately touched 2586.00, which touches Feb 5’s 2694.75 intraday low. It’s the original decline’s Pivotal Low, the low prior to Feb 9’s 2533.00 actual low. Having probed their 2730.50 interim high, returning to the Pivotal Low all but requires retesting the actual low.

A separate measurement already identifies the low’s retest as targeting 2509.00-2511.00. Separately again, the lower objective is already in-play for closing Thursday under 2652.00. Friday’s second consecutive lower close, and closing under its room for noise down to 2627.00, confirms.

There is potential for fresh lows Monday to be recovered through the afternoon. This would trigger a multi-session recovery. But the potential for a near-term durable bottom is low.

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