Pre-close View

Fresh highs meeting resistance of pre-payrolls anxiousness.

Optimism ahead of tomorrow morning’s Employment Situation report has enabled today’s post-open recovery. Extending from its 2086.75 low up to 2101.25 is producing the first retest of Tuesday’s 2100.00 gap up.

Being a gap up above all prior intraday highs, filling it was required. Sunday night’s 2103.75 new Globex trend extreme requires an intraday retest, too. But its outstanding attraction can’t prevent the filled gap’s resistance from triggering a little more backing-and-filling.

Probing fresh highs now allows a little more backing-and-filling without being bearish. This new element to the chart structure can cut both ways — optimism ahead of tomorrow morning’s report can now turn to anxiousness that inhibits extending any higher today. A pullback has room down to 2095.00 before suggesting anything more durable underway.

Otherwise, regardless of when the rally extends, its next higher objective above 2103.75 is 2016.00-2018.00. Today’s post-market Wrap will discuss the possible outcomes to trying to trend higher into the weekend.

REMINDER: I’m away from screens for the final hour. There will be NO post-close market Wrap, and the blog will be updated this evening. Thank you.

This afternoon’s 2097.00 bias-up signal was attacked to within 2 ticks before failing to trigger. Its reaction down attacked 2091.00 and consolidated ahead of the Beige Book release. It strengthened the case for hiking, triggering a dip back under 2092.00.

But not back to 2091.00, let alone lower.

So, the bias environment had expended a lot of selling pressure when its no-bias signal wasn’t going to gain any traction for its effort. The knee-jerk reaction down on news was only noise. The downside was done.

At least, it stepped aside for a 6-point surge to fresh post-open highs attacking 2098.00. And now the afternoon’s bias environment is lapsing, so yesterday’s lack of traction has become irrelevant. Trending above yesterday’s range is allowed.

An OPEC headline just triggered another knee-jerk reaction down which just touched 2094.25. Entering the final hour above 2098.00 could rally relentlessly through the close. Meanwhile, the intraday trend doesn’t signal it’s reversing down until breaking under 2093.00.

Knee-jerk reaction held… held again…

REMINDER: Join us in the chaRTroom at 4:03pm ET for the post-market Wrap. It will be extended to cover the bigger picture, since there’s no Saturday Review this weekend.

Shallow ranging off of the 2095.50 high had softened to 2093.25 when Fed Chair Yellen finally said something forward-looking. Apparently, a Fed rate hike in coming months may be appropriate.

MonthS. Not exactly affirming other Fed speakers that had been warming up the audience for June. Not contradicting them, either. Probably as dovish as possible given the circumstances.

Suddenly, we knew which of my three scenarios was unfolding: knee-jerk reaction down.

A sell signal triggered under 2092.75 quickly fulfilled its 2090.50 objective, piercing it by 3 ticks while RSIs became simultaneously oversold. Its reaction up touched 2093.50 which was a buy signal — expending literally as much buying pressure as was possible without actually reversing the trend back up. It was faded back down to fulfill the required retest of oversold RSIs at 2089.75.

Now comes the rest of that scenario: recover.

Back above 2092.25 has spiked up to 2094.25. The origin of the Yellen comment’s reaction has been retraced. And it has been probed a little. While that qualifies as a recovery, actually retesting this morning’s 2095.50 high would be optimal.

Meanwhile, there is potential for a new high close today, fulfilling the confirmed breakout’s outstanding requirement. It’s probably not a “new trend high close” which would also require its own subsequent higher close. But trend extremes tend not to develop around holiday weekends.

Narrow range now free to resolve.

The afternoon bias environment is lapsing. The shallow backing-and-filling influence we expected for today is no longer influential.

Resuming the rally today would also be likely to produce the eventual third higher close that became required by Tuesday’s confirmed breakout. Despite neutralizing that upside objective, the momentum could carry price higher into the three-day weekend.

If not already probing fresh highs into the final hour, then another dip to session lows would be likely. And a dip to session lows would be vulnerable also to extending another 10 points lower from there, into the mid-to-low 2070‘s. That could also drift into the holiday weekend.

The narrow, sideways drift that began after yesterday morning’s surge could persist. Flat-to-lower ranging into the weekend is possible, too. But a false break up isn’t likely, so almost any probe of fresh highs should be reliable for extending higher.

High’s retest reacts down hard.

Don’t blink, you’ll miss it

Overbought RSIs at this morning’s 2092.00 required a retest. It was just retested by a blip-up from the bias environment’s extremely narrow 2-1/2 point range.It reacted down even more quickly — and much more substantially, attacking the noon hour’s 2086.00 low.

The 15-minute 6-point dip hasn’t extended lower in almost 10 minutes. Back above 2088.25 would suggest that it won’t.

Back above 2090.25 would confirm this afternoon’s 2094.75 bias-up target is in-play. It’s already “unfinished business above,” requiring an eventual test. Its attraction can be satisfied overnight, but probing fresh highs with more than a single surge would create another attraction above.