Market Wrap

Tuesday afternoon’s bias environment began lapsing at 2:30 by surging to fresh post-open highs. Resistance at 2434.25 was quickly probed up to 2435.75. Nothing substantial, and the final hour’s entry didn’t budge any higher. Here’s why: the market collapsed through the 3:10-3:20 proxy window, and into the 3.37 position-squaring window. The balance of the session ranged sideways at 2428.00.

Every attempt to break lower intraday would have had one objective in-play — to retest the morning’s 2426.50 bias-down target that had held the overnight drop. It would have easily held if tested post-open, instead of only being attacked to within 2 ticks. Now its test would likely probe lower to compensate for the delay. Candidates continue to be 2424.25 and 2421.50.

Only gapping up Wednesday above 2434.25-2435.75 would be credible for marginalizing the pullback. Any  less opening strength would be likelier to reverse back down to fresh lows.

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

Monitor overnight Globex trading in the chaRTroom here.

Entering Monday’s noon hour so optimistically is precisely what had suggested it wouldn’t extend higher. Or, that extending higher would be doomed to failure. I would have preferred the latter. The former only  narrowed its range since then from 3-1/2 points to 1-1/2 points.

Avoiding a probe of fresh highs had made the pattern increasingly vulnerable to launching a multi-session correction. Not yet declining by the final hour had made a fresh high obligatory. Not required, but suddenly likely, and still likely to fail. That didn’t happen either.

Dipping into the close remained within the range. And like entering the noon hour optimistically, the late timing suggests its price action wasn’t sponsored by strong hands. Extending down Tuesday would be credible only if begun immediately, and without holding any test of support. Otherwise, “unfinished business above” at the morning’s 2440.00 bias objective remains outstanding, as does a higher close.

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

Monitor overnight Globex trading in the chaRTroom here.

The reaction to Friday’s Employment Situation report retraced all of Thursday night’s extension of Wednesday afternoon’s rally. But only all of it, back down to its 2428.75 low. Post-open action held its test, too, remaining in the orbit of the 2437.25 overnight high’s “new Globex trend extreme.” The overnight high was attacked to within 1 tick during the afternoon bias environment. Probing it into the position-squaring window attacked 2440.00, before settling back down under 2436.00.

The second consecutive close above 2424.25 puts into play 2447.50 and potentially 2455.25. Also, new trend extreme closes on Fridays all but require an eventual new extreme close. So, reversing down immediately on Monday would be likely to recover at some point. Reversing down would have room down to 2421.50.

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

Join us in the morning at 9:30 ET for the Saturday Review. Links will be sent overnight.

Thursday’s late breakout left outstanding unfinished business below at 2408.00. Extending higher fulfilled the next higher objective above 2415.00 which had been defining the past week’s ranging. Probing intraday above 2424.25 was still being tested as support through the entire afternoon’s bias environment and final hour. That is, until the position-squaring window, which momentarily probed the room for noise at 2428.00 by 10 ticks. Confirming the close on Friday would put into play substantially higher objectives.

The afternoon’s ranging up to the afternoon’s 2426.50 bias-up target wasn’t an optimal or decisive break above 2424.25, not until the final minutes that surged aggressively. And optimistically ahead of payrolls. So, closing higher again for confirmation would be helpful — not for the next objective’s setup, but for being a new trend high close on a Friday. There’s otherwise no intraday timing required for actually trending back down, but trending back down is the likely bearish setup, and not just avoiding confirmation above 2424.25.

The impending pre-open Employee Situation report was an excellent opportunity for cautious backing-and-filling. Instead, the report is being greeted optimistically, and vulnerable to a knee-jerk reaction down or to rejecting a knee-jerk reaction up. Regardless, a top won’t be indicated without closing back within the past week’s range.

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

Monitor overnight Globex trading in the chaRTroom here.

Firming into Wednesday afternoon’s bias environment already had started suggesting sellers were done. Not only for probing higher, but also for the probe’s timing. The 2404.25 bias-down signal was hardly attacked, and tested only after being too late to trigger. More so, that was in reaction to new from the Beige Book release.

Rallying through the position-squaring window recovered to unchanged. Overlapping unchanged around 2411.00 into the cash session close was then probed through the futures close up to 1 point above last Thursday and Friday’s 2413.75 closes. It’s not very different from Tuesday’s drop being recovered to unchanged, and probing it only when it didn’t matter.

Wednesday’s recovery was probably inhibited by not having dipped deeply enough. The 2402.75 low stopped at least 1 tick optimistically short of actually filling the week-old cash session gap, and at least 1 points short of the futures close. Potential to “lower prior highs” at 2399.00 remains alive. Extending higher Thursday requires the same setup, gapping up above prior highs — now 2415.00-2417.00.

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

Monitor overnight Globex trading in the chaRTroom here.