Market Wrap

The noon hour had isolated fresh session lows under 2441.00 down to 2437.25. Had that low been a retest of a prior low, or if its recovery extended above a prior high, then the balance of the afternoon could have recovered to Monday’s highs and higher.

No prior low was being tested and no prior high was recovered. the recovery could have developed anyway, but didn’t. The noon hour’s range broke lower down to 2434.00.

But the break lower was delayed until the last half-hour, essentially the position squaring window. And it held a test of last Wednesday’s 2435.50 close. Held it, as in still overlapping it at the close, but not necessarily rejecting its test.

Gapping up Wednesday above Tuesday afternoon’s 2442.50 high would reject all of the subsequent downtrending action. It would also recover the noon hour’s isolated probe under the morning’s lows. And it would trigger a short-squeeze targeting new highs. Otherwise, Wednesday’s open could be at the 2432.50 area of Friday’s “lower prior highs,” on the way down to 2425.00.

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

Monitor overnight Globex trading in the chaRTroom here.

Monday’s new high close was a reasonable trade-off for the bearish WedEX not being influential. A better trade-off was that the early indication of WedEX’s demise defaulted to extending the rally. Which it did, considerably.

Regardless of the degree to which the rally extended Monday, an outstanding structural requirement was neutralized. The two-week old requirement for at least one more new high close is now done. More may come, but none are required.

Along the way, Monday afternoon’s bias-up was triggered and now its 2454.00 target is “unfinished business above.” Attacking it to within 3 ticks at any time would neutralize it.

Ironically, AMZN offers a singular intersection of two competing influences — trending up, and overextended. Monday’s new high (green circle) failed to hold above recent “higher prior lows” (red circle). The trend is up, but the pattern is vulnerable to reversing down at any time. The broader market, too.

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

Monitor overnight Globex trading in the chaRTroom here.

Friday’s pre-open and post-open behavior was more in-line with WedEX than was Friday afternoon.

Especially since it is a passively bearish WedEX. The open’s bearish setup was both passive and active. Probing a prior high — like probing Thursday’s high overnight — and then reversing back under it is passive. Extending the reversing back under the earlier overnight low is actively bearish. This setup is responsible for the post-open 12-point plunge. Bouncing into and through the afternoon wasn’t bearish.

Friday afternoon ultimately ranged flat-to-higher. No bearish influence was obvious. The afternoon’s 2430.00 bias-up signal wasn’t touched until the final cash session bar — the final hour otherwise made no new high. Positive territory was never recovered. So, no bullish influence was obvious, either. There certainly wasn’t a bias-up, or any other inversion. This leaves Monday morning vulnerable to aggressive bearish behavior.

“Unfinished business below” left outstanding at 2418.75 would be a likely objective if the week were to open under pressure. Otherwise, ignoring the bearish WedEX or waiting out its morning influence would clear the way to new highs — if not also to a new high close, which another Friday has avoided despite starting the day in proximity.

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

I’ll send the Saturday Review link in the morning, well before its 9:30 ET start time.

Wednesday night’s decline was substantial, and it tested relevant attractions below. But nothing that required being neutralized. An attraction that required being neutralized was only attacked to within 3 ticks at the 2416.25 low. That takes care of that, for the rest of the day and a 16-point rally to attack 2433.00. But a lot of impatient buying is reflected in not fully testing the objective, while also piercing the overnight low by only 1 tick — while leaving outstanding a retest of last Friday’s oversold RSIs at 2412.50.

Friday afternoon’s bearish WedEX could become influential after the morning extends Thursday’s recovery. Or Friday morning could already have resumed the decline, before resolving down further. Being a Friday, the morning’s bias is likely to persist through the noon hour. And attacking this week’s lows intraday would be likely to break lower.

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

Monitor overnight Globex trading in the chaRTroom here.

The market wanted to trade higher on the FOMC news. So much so that it attacked last Friday’s 2443.50 high before the open. Reacting down on the Washington-DC news was quickly recovered to attack Friday’s high even closer. The recovery was too quick, and the morning was spent declining and consolidating.

The afternoon’s news greeted a narrow range that didn’t react much initially. A blip-down to 2434.00 snapped back up to attack 2441.00, but only to drop back down into the morning’s consolidation. Like the policy statement itself, Yellen’s Q&A wasn’t greeted from a position of strength.

So, if buyers can’t be attracted to the mountain, then the market drops to where they are. That was likely nearer to the afternoon’s 2427.25 bias-down target. It was probed by more than 1 point, filling the gap back down to Monday’s close. Bars only overlapped the target while RSIs diverged positively. Its reaction up triggered a buy signal above 2429.50 and extended up to 2437.75.

Wednesday’s pre-open high nearly neutralized the attraction to last week’s overbought RSIs, but it remains outstanding. As does the requirement for one more new high close. Meanwhile, rejecting positive territory in favor of negative territory has formed a passively bearish WedEX. That doesn’t require dipping any deeper before Friday afternoon. Remember, trends rarely reverse AT an expiration, even a Quadruple Witch like this week.

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

Monitor overnight Globex trading in the chaRTroom here.