Market Wrap (recording & summary)

We knew there was no bullish reason for Friday’s post-open retest of 2495.50. And we suspected that weekend illiquidity inhibited sellers from breaking under it. Monday’s plunge through it behaved as was expected, discovering an air pocket and bouncing from “lower prior highs” at 2485.00-2486.00.

That setup was then likely to begin an extended pullback down to 2460.00. So, why should we question that? Two reasons. First, the morning’s 2503.00 objective above wasn’t rejected, so it became “unfinished business above” to be met eventually. Second, the plunge’s catalyst was the knee-jerk reaction to a news headline whose weak-handed sponsorship crowds out stronger distributive sellers.

Recovering 2495.50 through the close would have essentially trapped shorts. A very late trending attempt did touch 2495.50 in the very last minute of Monday’s cash session, and futures extended to 2497.00. But that was 3 minutes too late.

Probing higher overnight or tomorrow morning is possible, as is fulfilling the 2503.00 objective above. Neither of which is required, but would still be likely to resolve back down into Friday’s break lower. And having held 2495.50 as resistance through the close, the decline is free to resume immediately.

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

Monitor overnight Globex trading in the chaRTroom here.