Market Wrap (recording & summary)

Is Wednesday’s low a durable bottom? The open’s probe under Tuesday’s 2616.00 lows by 5 points was absorbed in an unconventional way — by trending down throughout the entire opening 15 minutes of volatility, and no deeper. The balance of the session essentially trended up, including a midday flat-to-higher range up to 2635.00-2636.00. And that broke higher to 2644.00.

So, bottom?

Post-close high-profile earnings were likely to inhibit trending. Perhaps they did and that’s what caused the midday range. Pessimism and restrained optimism are constructive to bottoming. But Wednesday’s pattern didn’t end there. There was nothing pessimistic or restrained about the break to 2644.00. But that late optimism was neutralized by reacting down 14 points through the proxy window to the surge’s 2630.00 origin.

So, bottom?

Reversal signals don’t trigger on the same day the trend reaches its extreme. Fresh lows during the morning preclude Wednesday’s close from triggering a buy signal. Also, Wednesday’s low touched a 2-1/2 week old prior low before bouncing — not a “lower prior high” or retracement, but a prior low. It’s one of several I’ve identified during Big Picture reviews, noting that their support can be influential, but only temporary.

So, no bottom.

Wednesday’s cash session close was 2639.00 and Facebook’s earnings reaction encouraged extending to 2648.00. That may extend, but only temporarily, before returning to and through Wednesday’s lows.

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