Market Wrap (recording & summary)

Monday’s choppy open had set into motion a series of conditions, each of which has developed through Tuesday’s rally. Monday morning’s temporary probe of fresh lows at 2415.75, and extending its recovery through Tuesday’s opening retest of Friday morning’s 2439.50 high, tracked the basic template. Not being rejected early kept the door open to rallying late. Which was done up to 2454.00.

Steep and relentless upside are common characteristics of counter-trending. The counter-trend’s actual size is relevant only to the leg it is correcting. So, whether rallying 38 points is a lot or a little matters far less than Tuesday retracing 61.8% of the last downleg (from Wednesday’s 2474.00 high).

Another interesting feature to Tuesday’s rally was its sponsorship. The open triggered a buy signal at 2435.00 and never looked back. There was no constructive backing-and-filling, or other tactics typically employed by a rally to refuel buyers. It’s less a characteristic of a correction, and more an accident waiting to happen.

Regardless, reversing down still requires an actual sell signal to trigger, and there’s room down to 2438.00 before confirming a new downleg is underway. Meanwhile, the corrective rally is otherwise free to extend higher, next targeting 2461.00.

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

Monitor overnight Globex trading in the chaRTroom here.