Market Wrap

Even Wednesday’s FOMC policy statement couldn’t shake what is now a four-day streak of narrowly ranging sessions. There’s no actual trending, and it IS for lack of trying:

Gapping up Wednesday above Tuesday’s 2478.75 high could have formed a session-long rally setup. But the prior high held, and the balance of the session trended down to the 2472.00 overnight low. Had the attempt been any more substantial, there would be a more substantial bearish consequence for its rejection. Instead, the complete retracement is sufficient. On the other end of the day is the small, late probe under Tuesday’s low. Somewhat similarly, starting it earlier would have reflected strong-handed sponsorship. Instead, the late break’s failure doesn’t imply some bullish resolution.

Once again, neither sellers nor buyers gained traction for their efforts. So, trending in either direction Thursday morning won’t be very credible without a gap up originating it.

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Tuesday’s gap up to 2478.00 neutralized all unfinished business and attractions above. Just having delayed exploiting Monday’s break lower had made fresh highs likely. Previously existing was the 2476.25 new Globex trend extreme that had preceded last Thursday’s open. Yet to be an attraction was the morning’s 2477.00 bias-up target, whose 2472.00 bias-up signal wouldn’t trigger for another 45 minutes.

So, it’s interesting that the rally didn’t do anything to entrench itself. No afternoon bias-up target put into play, no uptrend gaining traction, no breakout close. Extending higher Wednesday depends upon gapping up above Tuesday’s highs, or else delaying a rally until late-afternoon. Like, in reaction to the FOMC policy statement, or in reaction to its reaction. The next higher objectives would be 2484.00 and 2490.00.

Rolling over late Tuesday was too delayed and too muted to be reliable for extending down. At least, for extending down without delay or without backing-and-filling. Not without gapping down to and/or through Friday/Monday’s “lower prior highs” at 2469.00.

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It took long enough. No, seriously — just long enough. Fighting back from an overnight dip to 2463.50 had opened only slightly lower at 2469.00. But the morning only dipped back down to the overnight lows. and only to the overnight lows. Firming through much of the afternoon’s bias environment to 2468.00 stopped short of recovering. But firming into the bias environment exit extended higher upon entering the final hour, probing the morning’s high up to 2470.50.

All of which could have taken less time. But it couldn’t have taken any longer and still had time to recover. It took long enough.

Had Monday’s entire pattern developed during the morning alone, then the bullish WedEX would have been fulfilled. Not optimally, since Friday afternoon had already retraced a dip, which is what Monday’s entire session did. Optimal would have been to trend up after the open’s dip. Monday morning’s thorough tests of support did hold, but the window had closed before recovering, so it did not fulfill the bullish WedEX setup.

Nevertheless, a second consecutive pullback has failed to extend down. The delay suggests that upside attractions will now be more influential, first at 2474.50 and then new highs. Extending down anyway should still begin by gapping down, or at least by triggering the morning’s bias-down, targeting at least 2458.50.

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Monitor overnight Globex trading in the chaRTroom here.

Friday’s high point was its recovery from the morning’s test of the 2463.50 bias-down target. That was 2 ticks short of the afternoon’s 2470.50 bias-up signal, and it printed at the 1:20 bias timing window. That’s when the bullish WedEX influence began, and price immediately began dipping.

Testing and attacking Thursday’s 2465.50 didn’t break lower — Friday afternoon wasn’t going to accomplish something that Friday morning had tried and failed. Its reaction spent the last half-hour rallying back to the afternoon’s 2470.00 high, piercing it by an errant tick at the cash session close. Ultimately, the bullish WedEX influence remained intact, so an aggressively bullish influence Monday morning remained likely.

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Thursday afternoon’s 2470.50-2474.50 range overlapped or was supported by Wednesday’s 2471.00 cash session high. The closing bar was overlapping it, too. If it’s confirmation of Wednesday’s breakout, then it’s not optimal. No higher close is required.

Probing higher highs is possible. The 2476.25 “new Globex trend extreme” requires an intraday retest at some point. Closing near it in its orbit doesn’t make its near-term test any likelier. Similarly, closing further away from “unfinished business below” at 2463.50 doesn’t make it less likely to be tested first.

Regardless, trend extremes don’t usually form into expirations. And the bullish WedEX already suggests an upward afternoon bias Friday — from what level, we don’t yet know. An overnight or morning drop that neutralizes 2463.50 would help to clear the way to trending up into and out of the weekend. Simply extending higher without another detour down might be inhibited.

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

Monitor overnight Globex trading in the chaRTroom here.