Market Wrap (recording & summary)

Woulda, coulda, shoulda. Tuesday afternoon’s bias environment was exited at 2625.00, the low of a 41-point drop from the noon hour’s high. But it was above the morning bias environment’s low, so not gaining traction. And that was the window where trending was likely to begin. Which it did, triggering a modest 75-point short squeeze up to 2693.00 and 2700.00.

After Monday’s close I described the template for a a substantial afternoon short-squeeze, but it required the morning to contain some scariness. But the open only probed lower, which didn’t fit the definition, not like the overnight plunge. Perhaps the overnight plunge WAS the template’s morning scariness element. Even then, the afternoon short-squeeze should have been more substantial from the refueling.

A more substantial short-squeeze than 75 points? Relative to what it was retracing, yes. Tuesday’s late high only tested Monday’s late high, the last bounce prior to sliding 170 points to the overnight low. That’s no small feat, and neither is its complete recovery — in any time frame. So, a lot of buying pressure was expended only to retrace a drop, and not to close above it. Even December’s prior high held its retest as resistance. That doesn’t marginalize sellers.

What would marginalize sellers? Maintaining a gap up Wednesday. At least above 2722.00, if not also above 2732.00. The reward would be a bigger bounce to 2784.00 or 2793.00. Anything shallower, not maintained or delayed would remain vulnerable to probing under Tuesday’s 2620.00 post-open lows, and potentially new lows for the move.

• Details and other markets coverage are discussed in the post-market Wrap recording here.
• Monitor overnight Globex trading in the chaRTroom here.