Market Wrap

There has been no bullish reason to revisit 2563.75 since its last test produced a fresh high. Breaking lower can still be avoided if the test is isolated. Wednesday morning’s test was isolated to the opening 15 minutes of volatility. At least, the air pocket below 2563.75 was contained within that window and to its 2557.50 objective. The 10:15 and 10:30 windows were testing 2563.75 as resistance.

Sellers weren’t rejected any more or any less than when Tuesday’s initial dip held its 2566.75-2568.50 objective and only only bounced to test 2570.00 instead of recovering it. Bounces are still possible, but they’ve been originating from a position of weakness, dooming them to failure.

A higher low at 2560.00 Thursday — instead of first rejecting a fresh low — could launch more than a bounce. But any initial selling must still be recovered above a relevant level through a relevant window to form a position of strength. Alternatively, gapping and trending higher through 2574.00-2577.00 would also be bullish, leaving a retest of this week’s lows outstanding until next week.

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

Monitor overnight Globex trading in the chaRTroom here.

Tuesday’s open ran into the same challenge as Monday, having trended down overnight. Post-open action differed slightly, first probing lower before recovering, unlike Monday’s impatient premature rally. But their recoveries resumed their similarities, with the morning’s high once again essentially defining the recovery’s peak.

An important difference between the recoveries’ peaks is that Monday repeatedly probed higher, while Tuesday barely attacked the morning’s high on several attempts. Monday’s ineffectual optimism was one marker of its tenuousness, which was proved by completely retracing its recovery. Tuesday’s pessimism can still prove to have been bullish from a contrarian perspective, by rallying overnight.

Time is growing short — if it hasn’t already grown too short — for a retest of last week’s highs and another downleg to be done by next Tuesday afternoon. Skipping the highs and only declining could extend very deep before the holiday’s seasonal bullishness intervenes.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday’s rally was premature. It started from too shallow of a pullback, and too near the open. Dipping to 2566.75-2568.50 and then recovering 2570.00 would have trapped intraday shorts to refuel longs. Post-open weakness also would have delayed the recovery leg until it could blend into the noon hour’s timing window and extend into the afternoon.

Dipping only to attack 2570.00, only pre-open, and surging through the first hour, didn’t attract reinforcements. Eking higher into a late surge up to 2585.50 was retraced back under the opening surge’s 2582.25 high for no net gain.

Monday’s rally did gain some traction. Exiting the afternoon bias environment above the noon hour’s high was the setup, and extending to fresh session highs through the 3:10-3:20 proxy window was the confirmation. If not already extended higher into the close, the traction can offer bullish context that enables a recovery after trending down overnight.

Overbought RSIs at Monday’s high require an eventual retest. That could also offer bullish context to recover from an overnight dip. Retesting Monday’s high already overnight would become vulnerable to reversing down, somewhat similarly to Sunday night’s initial rally.

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

Monitor overnight Globex trading in the chaRTroom here.

Thursday night’s 61.8% retracement of its afternoon recovery had presented an opportunity. Friday morning could rally back up to Thursday’s close or the overnight higher or higher, but the opportunity had to be exploited early. And it wasn’t.

That left the door open to resuming the overnight decline. Whether as a deeper correction of Thursday afternoon’s recovery, or to resume Thursday morning’s decline, a bias-down signal would have been very productive. But noN-bias triggered instead, and several attempts to trend down failed.

The afternoon bias environment’s probe above the morning’s highs wasn’t any more reliable. Its bias-up signal quickly contained the brief enthusiasm. Which sellers also failed to exploit, like the morning’s failed recovery opportunity.

We’ll discuss the bigger picture at this weekend’s Saturday Review, along with possible paths and strategies for the new week. We’ll also do instant chart analysis of any stock requests. I’ll send the link in the morning.

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

Wednesday night’s slide began from an overnight surge that had neutralized “unfinished business above” at 2594.50. Gapping down Thursday to 2577.00 extended down almost 31 points to 2363.75. Volatility remains very much alive.

Once again, despite a wide-ranging session, no immediate attraction was left outstanding. The afternoon’s 20-point recovery up to 2584.00 only touched the morning’s high. Both the morning and afternoon highs barely probed back above Tuesday and Wednesday morning’s ~2581.50 “higher prior lows.” Buyers expended all available buying pressure.

An interesting setup developed midday when the noon hour was entered and exited at 2570.00. That was the next lower objective. More significant is that the noon hour probed it temporarily down to the relevant 2363.75. If/When Thursday’s lows are retested, they’re unlikely to hold.

Overnight reinforcements might extend Thursday afternoon’s recovery to fill the gap back up to Wednesday’s 2591.50 close. There’s still room for noise up to 2600.75. Being a Friday, closing higher could be relevant. Being a Friday, Thursday’s plunge could repeat if already underway at the open.

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

Monitor overnight Globex trading in the chaRTroom here.