Market Wrap

Trending Wednesday wasn’t unlikely. It was unlikely to extend. And likely to be reversed. The morning’s gap down probed lower, albeit not all the way down to the 2579.75 overnight low, which had probed Tuesday’s low. The morning’s bias-down signal held in time to put into play an offsetting test of its 2589.25 bias-up signal. So, trending or not, the dip became required to reverse up.

And while reversing up, the attraction enabled triggering the afternoon’s 2588.25 bias-up signal. The bias environment ranged narrowly flat-to-higher, steepening its slope slightly into the 3:37 position-squaring window. That proved too much as its reaction dipped back down to test the bias environment’s 2589.00 low. It was too late to be strong-handed sponsorship, and the afternoon’s 2594.50 bias-up target becomes “unfinished business above.”

Wednesday’s late dip back under 2590.50 is interesting, as the close was still overlapping it. Decisively recovering it would have formed a position of strength to help absorb a reaction down Thursday. Prior probes above 2590.50 were also rejected. Since 2600.75 is likely to be tested after fulfilling the 2594.50 unfinished business, reacting back down under 2590.50 would be very bearish. Otherwise, closing any higher would next target 2617.25.

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

Monitor overnight Globex trading in the chaRTroom here.

In yesterday’s Market Wrap, I asked whether last week’s interim pullbacks to 2563.75 refueled the rally to exceed its 2590.50 objective. The next higher objective at 2617.25 isn’t put into play until closing above 2590.50‘s room for noise up to 2600.75. Meanwhile, topping can test 2600.75, too. So, the two scenarios can be perfectly identical for awhile.

One clue is in the rally’s self-preservation techniques. Holding tests of 2563.75 was one, but that’s been done. Another is to create attractions above and then leave them outstanding as “unfinished business above.” A “new Globex trend extreme” was created Monday night, but it was neutralized as soon as was possible by the morning’s retest of it.

No unfinished business below was left outstanding, either. The morning’s reversal objective at 2583.50 was probed by nearly 3 points. There’s no live attraction in-play, the last attraction has been met and held, and a reaction down has held above relevant lows. So, Wednesday’s session isn’t likely to trigger a meaningful signal. So, trending Wednesday is likelier to be counter-trend. Another clue.

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

Monitor overnight Globex trading in the chaRTroom here.

Sunday night’s slide into negative territory was recovered before the open, and not repeated, isolating it to the overnight. Isolation or its attempt has been an ongoing characteristic of this rally. And it has been rewarded — Monday morning’s 2590.50 bias-up target was met to within 3 ticks at the afternoon high.

2590.50 is also the rally’s next higher objective. It had been put into play by recovering 2563.75 previously. A couple of subsequent dips had threatened to break back under 2563.75. Recovering those dips has been rewarded by fulfilling the 2590.50 next higher objective.

But is that reward enough, considering the extra tests as support?

Higher highs are possible so long as sellers don’t gain any traction. There’s room for noise above at 2600.75 before a probe above 2590.50 would be any likelier to extend to its next higher target of 2617.25. Ample opportunity Monday to close above 2590.50 was not exploited, as a last-minute dip retraced to 2588.00.

Sliding through the close extended to 2586.75. Probing lower just several minutes earlier could have reversed the trend down. Instead, extra selling pressure was expended without gaining traction for the effort. Not that the late dip can’t find actual sponsorship to extend down overnight, but the gap back to Monday’s close would want to be retested from below.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday afternoon’s 2586.00 bias-up target was met to within 2-3 ticks. It’s still an attraction so long as price remains in its orbit, and doesn’t break under a prior low. But it does not become “unfinished business above.”

That attraction above may have helped to avoid any late reversal — whether a steep collapse, or shallow backing-and-filling. It’s already difficult on a Friday to reverse down after exiting the afternoon bias environment at fresh session highs. In fact, the nearest sell signal at 2582.75 was only touched and not triggered while being attacked 2-3 times during Friday’s last 60-90 minutes.

Late price action fluctuated around 2583.50, which was the optimal level for a new trend high close on a Friday. Clearing all prior intraday ranges would be preferable, but Wednesday’s 2585.50 high was only touched before its obligatory resistance reacted down.

The next higher objective at 2590.50 remains outstanding. Two weeks of expanded volatility is likely to persist after the weekend. We’ll discuss those topics, their implications, and more during this weekend’s Saturday Review.

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

Look for email in the morning containing the link to this weekend’s Saturday Review, which starts at 9:30am ET.

For closing almost unchanged Thursday, the rally’s essence was thoroughly tested since Wednesday’s close. Two separate collapses from 2574.00 or higher each tested the 2563.75 or lower. And each was recovered entirely. The first collapse was overnight, and recovered to greet Thursday’s open unchanged. But it didn’t attract reinforcements, which enabled another collapse.

The latter recovery stopped short of the morning’s highs at unchanged while consolidating through the afternoon down to 2571.00. But the final hour rallied to fresh session highs at 2578.25. That’s positive territory, but still short of Wednesday afternoon’s prior highs — and late enough to be suspicious of its sponsorship being weak-handed optimists ahead of Friday morning’s Employment Situation report.

The vulnerability to reacting down Friday is mitigated somewhat by the two failed attempts to break under a relevant low. This usually means that sellers are done. But there’s no bullish reason for another reaction down — as a collapse, or otherwise — so there’s no bullish excuse to delay rallying. Rallying would target a retest of 2585.50, if not also the rally’s 2590.50 objective, and possibly another new trend high close on a Friday. Fresh lows could extend intraday down to 2253.00.

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

Monitor overnight Globex trading in the chaRTroom here.