Market Wrap

Monday morning wasn’t as optimistic as last week’s relentless rally. But the containment lured in buyers with the promise of a new high. They got just that, that and only that, by 1-2 ticks.

The morning’s bias-down signal was never attacked, let alone triggered. Finally probing above Friday’s 2742.00 highs as the morning bias environment began lapsing, the afternoon’s bias-up signal triggered easily. The overnight high didn’t require being retested, but it was pierced, and it held. The afternoon’s 2750.25 bias-up target became “unfinished business above.”

Already fulfilling the requirement of Friday’s new trend high close for another, now there is no other unfinished business above. And there is no timing requirement to fulfilling 2750.25, which could be met overnight — whether or not that were to create another upside attraction would be important, but trending down through Tuesday’s open could extend.

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

Friday’s reaction to the Employment Situation report had knee-jerked down, then knee-jerked up between 2730-2735. But the open was greeted where the Employment Situation report was greeted. It was still a gap up, but touching the 2733.00 bias-up target reacted back down under Thursday’s “lower prior highs” to 2726.50. That also tested the 2727.75 bias-up signal as support to form the session low.

The balance of the morning recovered to touch the pre-open high. And when the afternoon’s no-bias environment began lapsing, the balance of the session trended up to a new high at 2743.25. It is a new trend extreme close on a Friday, which requires at least another eventual higher close, regardless of any interim price action.

We’ll discuss that feature and others at this weekend’s Saturday Review, which begins at 9:30am ET. Login instructions will be sent in the morning.

• Details and other markets coverage are discussed in the post-market Wrap recording here.
  

Wednesday’s close above 2703.00 had put into play 2722-2727, which was already tested Thursday. Breaking beyond either end of the 2722-2727 range would be likely to trend in that direction. There’s no timing requirement to resolving the range. Obviously there’s not, as the targets’ morning tests bounced to either side of the 2722-2727 range through the close.

Sliding through the cash session close attacked the 2722-2727 range’s lower-end. It held, but it had already become too late for a break to be relevant. And that was after another effort to break lower had held 2724.50 through the proxy window.

Perhaps the late-afternoon’s weakness was caused by anxiousness ahead of the next morning’s Employment Situation report. Trending back up Friday morning could resume the rally, although still being vulnerable to reversing down into the weekend. Already trending down overnight might extend, but would leave a gap back up to Thursday’s close wanting to be filled.

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

Friday’s pre-open retest of the 2-week old high followed a relatively shallow interim pullback. Shallow, and narrowly ranging are not accumulation. So retesting the high could have been limited to 2703.00. Extending higher established a couple of other potential peaks that could have limited the session high. Its highest at 2714.00 did just that.

2703.00 and 2714.00 each could have attracted counter-trend sponsorship. But 2703.00 was probed early enough and high enough to put into play targets above it. And despite it fulfilling the afternoon’s buying pressure by being the bias-up target, 2714.00 was tested late enough to dissuade counter-trend sponsorship.

Clearly, something relevant happened at 2714.00. It was pierced by a single tick before reacting down 3 points into the close. Closing above it would have made the next higher objective at 2722-2727 more capable of extending higher, or at least ranging sideways. If met Thursday morning immediately after having held 2714.00, then 2722-2727 would be as vulnerable to reacting down as 2703.00 and 2714.00.

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

The new year’s first session was optimistic throughout. After Friday’s 30-31 point drop from its 2698.25 pre-open high, immediately uptrending wasn’t at all assured. But Tuesday’s 2674.50 open was the minimum requirement to signal that Friday’s post-close portion of its drop was only an anomaly. That was the first step for putting into play a retest of Friday’s pre-open high.

Tuesday’s bias-up signal was renewed and its 2692.75 renewed bias-up target was met to within 3 ticks as the bias environment began. A narrowing consolidation didn’t resolve until one hour following the afternoon bias environment lapsing. But it resolved up as was likely, almost literally exploding higher as was required.

2696.00 was touched at Tuesday’s close. It is natural resistance at a 61.8% retracement of the two-week old high session’s range. Any higher would all but ensure extending to fresh highs at the 2700.00 area, if not also 2703.00. Any higher depended mostly on there having been a deeper interim pullback, for which the new high origin of Friday’s intraday drop disqualified it.

Extending higher than 2703.00 is possible despite too shallow of an interim correction. If carried away with itself, the rally’s next higher objective is 2722.00-2727.00. Similarly, no matter how likely, higher highs aren’t required as there’s no unfinished business above.

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