Market Wrap

Have a safe and Happy Thanksgiving!

The pre-Thanksgiving volume contraction had an effect on volatility. A pre-open surge touched the morning’s 2600.00 bias-up signal and only attacked it post-open. Reacting down choppily and relentlessly through the noon hour probed the overnight low by 3 ticks down to 2593.75. Firming into and out of the afternoon’s FOMC Minutes tried to trigger a buy signal above 2597.50.

Potential down to 2591.75 was left unresolved. It’s not “unfinished business below.” But it was the likely target of Thursday afternoon’s failed Ascending Triangle. And it would have been targeted as an offsetting test of the morning’s bias-up signal, which had been only attacked. Still not required, but its test would be likely — and potentially 2588.25 or lower — in reaction to any bearish global influence on Thursday night’s Globex.

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

Monitor overnight Globex trading in the chaRTroom here.

Tuesday’s gap up immediately neutralized the 2590.50 “unfinished business above” that had been left outstanding from last Thursday afternoon’s pattern. It had provided context for anticipating the interim decline was only a temporary pullback. The gap up barely hesitated extending, resolving higher on tests of two prior resistance levels. Holding either one would have ended the rally there.

2600.00 was the likely objective for not rejecting the gap up. It was tested by a false break out of an otherwise narrow consolidation. The pattern is a “failed Ascending Triangle.” Its rejection broke back under the range ahead of the close, and then after. Typically, the reversal completes a correction — probably either to 2591.75 or to 2588.25 — and then recovers to resume the prevailing trend.

Evaporating volume into Thanksgiving makes it only more difficult to attract sponsorship for trending. There is no “unfinished business above” that requires a recovery or resuming the rally. Unless trending up to new highs through the open, then Wednesday morning’s likely scenario is backing-and-filling and retracing the rally.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday’s flat-to-higher open was no small accomplishment. Collapsing 9 points overnight had held two tests of the morning’s 2568.25 bias-down target. The session’s first minute ranged 2577.00-2580.25 to begin consolidating. And price eked higher to 2583.50 into the afternoon. Positive territory wasn’t probed intraday nearly so much has was negative territory overnight. But the recovery wasn’t rejected.

And not for lack of trying. A blip-up after entering the final hour touched 2584.00 and reversed back down to test 2580.25. Extending down was never impossible, but by then it was not credible. That is, even extending down much deeper would not have been sponsored by strong hands.

Gapping down Tuesday or breaking a relevant support through a relevant window can still trigger at least a retest of Sunday night’s lows. Seasonal bullishness isn’t yet overwhelming, so any meaningful dip must be aggressive. Meanwhile, the recovery back to last week’s highs or higher remains intact, however slowly it cares to unfold. Pre-holiday volume is starting to suffer, and recovery’s pace suffers along with it.

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

Monitor overnight Globex trading in the chaRTroom here.

Was the bullish WedEX influential Friday afternoon? The day ended by probing the morning’s lows, finally. But only overlapping, and in a relatively narrow range, which began by the first hour’s Inertia signal. No pattern that developed Friday is going to be reliably predictive. So, bullish WedEX remains credible for producing a rally throughout Monday morning. A rally would still be credible from any open, even from gapping down, unless trending down through the open.

Separately, the 6-point pullback from Thursday’s rally, which had extended to 10 points overnight, is now 13 points at 2576.50. That’s the room for noise to a 61.8% retracement of Thursday’s range. And it’s a 38.2% retracement back down to Wednesday’s 2555.50 low. If that hasn’t sufficiently stretched the rubber band to snap back up, then the week-long decline may resume with a vengeance.

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

REMINDER: This weekend’s Saturday Review is cancelled. The chaRTroom will re-open with Sunday night’s Globex session at 6:00pm ET.

PROGRAMMING NOTE: I’M AWAY FROM THE SCREENS AFTER FRIDAY’S OPEN UNTIL NOON. ALSO, THIS WEEKEND’S SATURDAY REVIEW IS CANCELLED.

WedEX had failed to trigger Wednesday. Thursday’s gap up above Wednesday’s range remedied the situation, triggering a passively bullish WedEX by proxy. It influences Friday afternoon and Monday morning, but not Friday morning.

A lot of other upside attractions were neutralized during Thursday’s tremendous intraday rally. And 87% of the drop from last Tuesday’s 2594.50 overnight high has been retraced in a relatively brief period of time since Wednesday morning’s 2555.50 low. Nothing prevents reacting down immediately.

But Thursday afternoon’s bias environment exit did already produce a 6-point dip into the close. And the intraday high came “only” within 1 point of fulfilling its 2590.50 bias-up target. The gap back up to last Wednesday’s ~2593.00 close and the “new Globex trend extreme” above it were somewhat attacked. Probing any higher would have potential to 2600.75.

The gap back down to Wednesday’s 2563.75 close requires being filled eventually. That specific level’s retest is already vulnerable to extending down sharply. So, any potential to retest the highs or at least to firm Friday afternoon would become unlikely if Thursday night or Friday morning were to dip too much.

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

Monitor overnight Globex trading in the chaRTroom here.