Market Wrap (recording & summary)
Words could only describe so much. But this picture of S&P futures since Wednesday afternoon’s low shows 
what the weekend’s impending illiquidity can do, and what it can prevent.
Reacting down from the overnight rally was entirely legitimate. That is an irrelevant timing window, so it can’t gain traction. And it greeted the open at the 2688.25 bias-up signal’s resistance. More so, the overnight rally was an extension of Wednesday’s late surge. It was only noise, having peaked at resistance of the afternoon bias environment’s high.
An entirely legitimate and fully expected reversal down. Pretty productive, too, putting into play an offsetting test of the 2681.50 bias-down signal. (Add it to 2679.00 and 2675.50 outstanding.)
But the drop stopped suddenly, and permanently for the day. Weekend illiquidity inhibits sponsorship, and promotes noise. Gapping up Friday above prior highs would be credible for extending higher into year-end — the same setup as every other day this week. Meanwhile, there briefly visiting the lower objectives is likelier, while being vulnerable to extending down even deeper.
As long as we’re sharing pictures, here’s another. We professionals consider the historical metrics that the rally has gone too far, which ironically adds bricks to the proverbial “Wall of Worry” keeping the rally alive. But, what do we know. Here’s an example of how popular the stock market rally has become among those whose ignorance is blissful:
The last time I recall seeing a non-analyst’s widely publicized opinion is 10 years ago:
I’ve noted on the following long-term EUR / USD chart where Gisele proclaimed that paying her millions of dollars would offend her:
That’s timing which many market analysts only wish they could match. And I’m not saying Kanye has Gisele’s expertise. But it’s too cold to measure miniskirts, so we’ll have to wonder whether the stock market’s chart will have taken a similar turn in several months.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- Monitor overnight Globex trading in the chaRTroom here.