Market Wrap

Monday’s impressive surge had only extended higher overnight. Not at the same slope or to the same degree. And not for very long after Europe’s opens failed to provoke higher highs. Disappointment and concern triggered a slide that fell to 13 points under the overnight high. But the only critical factor was whether the earlier overnight low would be recovered, because its break would be bearish after having probed the prior intraday high.

The earlier overnight low was recovered, and sellers were marginalized. Marginalized until the overnight drop’s buyers were rewarded for rescuing the rally. That because the morning’s high, which probed 2-1/2 points above the overnight high. But entering the noon hour back under prior highs signaled that buyers weren’t gaining traction for the effort.

The balance of the session chopped sideways in a 7-point wide range that hovered exclusively above the prior intraday range. The only “unfinished business above” is the overbought RSIs left outstanding at the morning’s high, which can be neutralized overnight.

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

Both of Monday’s bias windows triggered bias-up while also having fulfilled their targets. Both essentially held their tests as resistance for the duration of their bias environments.

The morning’s bias-up target was met during a 13-point upleg through the open. It resolved higher at noon, in reaction to headlines announcing the Senate’s agreement that added 8 points into the noon hour’s high. Its its peak was a test of the afternoon’s bias-up target, which held until the last half-hour.

Then came another 8-point upleg, the session’s most impressive. It was no more productive than the noon hour’s rally, and less so than the open’s rally. But its slope was steeper. Steeper into the close of a trending session, which is very aggressive action no matter how productive.

The new trend high close mandated by Friday’s close is now fulfilled. To the degree that Friday’s very late probe higher can be considered a breakout, then Monday’s higher close can be considered its confirmation — but Fri/Mon breakout confirmations aren’t reliable.

If the chart were inverted to form a plunging correction, then I would expect a reliable reversal soon. Either already underway overnight, or after the open fails to maintain a probe higher. This is not a correction, and the next higher objective is 2848.00, so the burden of proof is surely on sellers.

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

Probing a new high Friday wasn’t required, but it was likely. Rejecting it wasn’t required, but it was likely. Probing a new high before the bias environment exit (2:30) would have been easier to reject, for its sponsorship possibly having run its course. Originating after the proxy window exit (3:20) would have been easier to reject, for its sponsorship being weak-handed.

Friday started printing new highs in that sweet spot between the two windows. And it extended to 3 points above Tuesday’s 2809.50 peak. Its reaction down held Tuesday’s peak as support, then extended up to 2815.00.

The bearish WedEX influence wasn’t obvious, if it existed at all. The signal did not invert, and may as well be considered invalidated — except that it still provides a template for trending down throughout Monday morning. But that would be moot if not already trending down post-open.

Regardless, overbought RSIs at the 2812.50 high require an eventual retest. The new trend extreme close on a Friday now requires another eventual new trend extreme close. And trend extremes aren’t normally associated with expirations. None of which prevents immediately reversing down Monday for what would be only a temporary detour.

• Details and other markets coverage are discussed in the post-market Wrap recording here.
• Join us in the morning for this weekend’s Saturday Review. I’ll send its link overnight.
  

Thursday’s market was caught between a relentless series of dueling headlines ahead of the afternoon’s government-shutdown votes. Retail buyers were also inhibited by shock and disappointment in not being greeted by the open gapping up. Price action was generally sloppy throughout the day. Behaviors and relationships were otherwise normal. Overnight choppiness projecting intraday choppiness was fulfilled. Relevant levels held tests through relevant windows, or were recovered. Although not required, there’s still potential for a probe of new highs before the bearish WedEX begins influencing Friday afternoon.

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

Wednesday’s opening bar measured more than 2 points, and it overlapped the morning’s 2787.50 bias-up signal. That’s wide. And it was almost 7 points off the pre-open high which had printed not much earlier. Also wide. None of which was arbitrary, as the drop originated from within 1 tick of the morning’s 2794.50 bias-up target. Then the drop became a plunge, extending down to 2780.75. Wide.

The point being that a lot of selling pressure was expended in a relatively brief time frame. An important point, since it was totally absorbed, swallowed whole. Not only retraced entirely, but reversed by at least as much in the opposite direction. And the reversal persisted relentlessly into the final hour. That was quite a rubber band being stretch.

So, absorbing the opening dip was well-rewarded intraday. Not out of the ordinary. Only the wide swings make it unusual, but the ratios were not. “Unfinished business above” was resolved by retesting Tuesday’s 2800.75 opening gap, and ending at a new trend high close. Being within a prior session’s range does make the new trend high close less meaningful, but it qualifies.

Unfinished business below was left outstanding at 2772.50 by the morning’s no-bias trending. Meanwhile, having probed Tuesday’s 2808.50 prior high without closing above it, WedEX triggered passively bearish. Maintaining a gap up to new highs Thursday would change that to actively bullish, regardless of the session’s resolution. Regardless, the influence isn’t relevant until Friday afternoon.

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