Market Wrap

Potential for extending the current bounce up to 2433.00 is moot, now that Wednesday has closed above it. The low was essentially the open’s test of 2435.50, or 3 ticks lower. Intraday extended to attack 2444.00 and reacted down only 4 points into the close.

A second consecutive higher close isn’t required in order to extend higher eventually. But it would provide helpful confirmation that a subsequent pullback was only temporary. Already pulling back Thursday morning has considerable room before reversing momentum down.

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 tested and held relevant support through a relevant timing window. That relevant level was the morning’s bias-down signal. Consequently, an offsetting test of the bias-up signal was put into play. And it was on the way to being tested when political headlines triggered a plunge.

Knee-jerk reactions to headlines are sponsored by weak hands. And their reactions are doomed to failure. Even if strong-handed opinion shares the same direction, they’ll step back so that weak hands can trap themselves, and then reverse the trend. Tuesday morning’s plunge didn’t require being recovered the same day, but that didn’t stop it.

The offsetting test of the morning’s bias-up signal was neutralized, too, being attacked to within 3 ticks. Momentum didn’t reverse back down, keeping the door open to fresh highs for the week — unless Tuesday’s low is broken through the close.

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

Monitor overnight Globex trading in the chaRTroom here.

We knew early that Monday wasn’t going to be a “dry cleaners” morning. But we also knew its trending attempts would likely fail. Isolating probes above or below 2425.00 Monday was also important. The overnight probe was isolated through the open, but the sellers that setup attracted weren’t able to break under Friday’s last relative low. Which led to the morning bias environment’s rally, which didn’t reject its probe above 2425.00, but held the bias-up signal.

Closing above or below Friday’s 2425.00 high was similarly important Monday. So, of course, the session closed more AT it than beyond it in either direction. Trending attempted, and failed.

The late blip-up to 2430.00 seems unrewarding to buyers that kept the afternoon propped up above 2428.00. But its reaction down left no “unfinished business above.” And its reaction down also developed too late to be predictive, regardless of dropping to 2424.00 through the futures close.

Rejecting an early rally effort, or simply trending back down, would be credible for launching a retest of last week’s lows. Trending up would all but require gapping up above Monday’s highs.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday’s Employment Situation report was greeted at Thursday morning’s 2410.25 low, but not trending up. The gap up was only several points higher. And the morning ranged choppily sideways. All of which was more reflective of the ongoing downtrend’s overwhelming momentum, and less about the bottom finally being in.

The afternoon’s 2423.00 bias-up signal triggered officially, but only by a 1-tick margin. Piercing higher momentarily was random noise, and not trending. Its target won’t be considered “unfinished business above.”

Essentially, Friday’s session was full of optimism and fulfilling for optimists. But its major accomplishments were to delay the eventual fresh low, and to stretch the rubber band for starting the next move lower. A fresh low can still form a bottom if it were to develop correctly. Reversing up already Monday would not be credible without gapping up at least 12-13 points.

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

Join us for this weekend’s Saturday Review, which begins at 9:30am ET. Its link will be emailed early morning.

Thursday’s gap down was due to an overnight slide, but also the product of a pre-open bounce. The slide’s 2416.00 low had chipped away at prior lows, while the bounce retested Monday and Wednesday’s 2420.50 lows as resistance.

The post-open collapse to 2410.25 — testing the 2411.00 renewed bias-down target — established that sellers were strong-handed. Bouncing intraday held a retest of 2420.50 to avoid indicating otherwise. And falling back down to fresh lows proved it.

2411.00 could have sufficed for ending the nearly 3-week decline. Thursday’s reaction up from testing it wasn’t arbitrary, but a complete retracement back to the open. Still testing 2411.00 at Thursday’s close instead of recovering would have sufficed to suggest the decline remains intact. Even more so for closing under it — it was ultimately probed down to 2405.25.

Unless Friday’s Employment Situation report or some other catalyst were to produce an opening gap up above 2420.50 and then some, the next lower objective(s) at 2399.00 if not also 2393.00 are in-play.

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

Monitor overnight Globex trading in the chaRTroom here.