Market Wrap

Tuesday night’s rally had attacked Wednesday morning’s 2430.50 bias-up signal. Its post-open rejection included a plunge that filled the gap back down to Monday’s 2420.50 close. Stopping short of Monday morning’s 2418.50 lows probably only delays the eventual break lower, and the domino effect leading to 2399.00 and 2393.00.

Overnight resistance is at 2433.00. But recovering 2435.50 through Thursday’s open would be credible for ending the 2-1/2 week old downtrend, and also for resuming the rally to fresh highs. Fresh highs might be limited to 2454.00, but fresh highs.

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

Monitor overnight Globex trading in the chaRTroom here.

Exceeding Monday morning’s 2435.50 bias-up target by 1 point through 10:15 renewed the bias-up signal. That’s more of a suggestion than a requirement, especially on a holiday-shortened session during a 5-day working holiday. Its reaction down formed a Symmetrical Triangle that broke sharply lower at noon down to its 2427.50 target.

A big snap back up was denied, despite testing “lower prior highs” down to 2426.50, and despite the drop being a knee-jerk reaction to a headline (re: ECB). RSIs were simultaneously oversold instead of diverging positively. Bouncing to 2431.00 resolved down to 2422.00 through the futures close.

Hold-short wasn’t overwhelmingly compelling, but could be considered with a bounce limit at either 2425.25 or 2427.50. Extending down at all would likely retest Friday morning’s 2418.50 lows, which offer little support if any, on the way down to fresh lows. Recovering Monday’s 2436.50 highs through any relevant timing window could instead end the two-week decline and rally back up to new highs.

HAVE A SAFE AND HAPPY INDEPENDENCE DAY!

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

Monitor overnight Globex trading in the chaRTroom here.

Friday, pre-holiday, thin volume, no trending. What else is new.

The overnight break higher to 2426.75 didn’t originate so late that it would be doomed. Its early retest up to 2428.25 failed to attract new sponsorship to extend. And the reaction down fell back into the overnight range at 2418.50. But no lower, stopping short of filling the gap back down to Thursday’s cash session close. It doesn’t require being filled, but avoiding it set the tone for weak-handed buyers.

The morning bias environment’s exit immediately began retracing back up to the open’s 2428.25 high. Just drifting, which was entirely possible and not at all abnormal for a Friday afternoon. But it had no specific attraction, so it wasn’t signaled. A very late blip-up to 2429.75 originated too late to be reliable for extending, and instead reacted back down sharply to 2419.75.

Ultimately, the session had no predictive value. Neither will Monday’s abbreviated session, but it may still be volatile as was Friday.

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

REMINDER: NO SATURDAY REVIEW ON HOLIDAY WEEKENDS. THE chaRTroom WILL RE-OPEN NORMALLY FOR SUNDAY NIGHT GLOBEX, WHICH TRADES THROUGH MONDAY’S NOON HOUR.

Overnight action had extended Wednesday’s session-long rally pattern up to 2445.00. Not maintaining the overnight extension above Wednesday’s 2440.50 highs was the only way to avoid probing higher post-open. And it was the only path for the morning to trend down without gapping up 2431.50. And while 2431.50 was likely to define the pullback low, not holding it targeted fresh lows under 2413.50. They got to 2402.25.

2402.25 was tested within minutes of reaching the afternoon’s 2409.75 bias-down target. Its test was fully retraced within minutes, too. That smelled of capitulation, and its reaction up extended up to 2422.50. The “V” bottom left outstanding at the low tends to be retested. But it would likely hold if tested AFTER Friday’s open, being the 5-day holiday weekend.

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

Monitor overnight Globex trading in the chaRTroom here.

We started the day Wednesday with a review of all the “ineffectual optimism” that had been fueling the decline from a contrarian perspective. That’s weak-handed sponsorship, meaning that strong hands were sellers. So, did strong hands already vacate the market earlier than usual Wednesday, allowing weak hands the day’s substantial run-up?

Closing above a relevant level should define the difference between strong-handed and weak-handed sponsorship. And Wednesday did close at or above the relevant levels of 2435.50 and 2538.00. That can be invalidated by gapping down Thursday to and or through 2431.50. Holding a test of 2431.50 would more likely establish a session low.

Keep in mind that volume may remain relatively stable, but actual liquidity — a diversity of opinion, sentiment and motivation — will be thin. Almost like a Friday, the morning’s bias can extend through the noon hour.

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

Monitor overnight Globex trading in the chaRTroom here.