Market Wrap (recording & summary)
NOTE: THERE IS NO SATURDAY REVIEW THIS WEEKEND. MARKET WRAP WAS EXTENDED FRIDAY TO REVIEW THE BIGGER PICTURE. DROP-IN SUNDAY NIGHT FOR STOCK REQUESTS.
If a tree falls in a forest, does it make a sound? Actually, that’s not relevant here. But the opposite seemed to have happened Friday afternoon. Like Jack’s fabled beanstalk, and perhaps sown from the same magic seeds, an intraday plunge back 
to sharply lower lows was recovered entirely before the close.
The open’s blip-up to 2618.50 had reversed down nearly 90 points to within 5 ticks of Monday night’s 2529.00 low. The morning’s bias-down influence persisted through the noon hour as Fridays often do. The afternoon bias environment’s target had been tested, and a blip-down under it was reversed up sharply from 2530.25 to the 2590.50 open. Its correction through the position-squaring window recovered to fresh highs attacking 2538.00, 117 points off the low.
So, was disaster averted? Yes, for Friday, but not necessarily for Monday. Any delay in resuming the decline will get every benefit of the doubt for extending the bounce into Tuesday morning. Otherwise, the session’s quasi-Pivot Reversal is often deceptive. The setup identifies extreme sentiment, but Friday’s low stopped optimistically short of touching Monday night’s low. Its intraday trend extreme is always suspicious, and the reversal’s momentum is difficult to maintain through the weekend. And the afternoon bias-down environment’s rally still requires being retraced down to 2558.00.
There’s a lot of upside for even a corrective bounce if Monday doesn’t decline. And if there’s any environment that can bounce hundreds of points in a brief period of time, it’s an environment that is already bouncing (and dropping) hundreds of points in brief periods of time. There’s also a lot of downside, even if only to form a more durable bottom. Retesting the 2529.00-2530.00 lows would target 2509.00-2511.00.
Ironically, Friday’s bounce now offers a lot of room to expend a lot of selling pressure that would have significantly overshot 2509.00-2511.00 to become a more entrenched bear market. A bottom last Tuesday would have been credible. So would a bottom this Tuesday. Or, in case of a bounce Monday, starting the next downleg Tuesday would be credible, too.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- chaRTroom will re-open Sunday night for Globex.