Market Wrap (recording & summary)

The topping pattern that would have been credible Thursday finally played out Monday. So, why is it suspicious? One word: CATALYST.

Attacking or testing 2677.00 last week would have sufficed to expend all currently available buying pressure. Reversing down from its test would have sufficed to signal counter-trend sponsorship taking control. Delaying its reversal made fresh highs likelier, up to at least 2681.00, which was tested and attacked Sunday night and Monday morning. The bias environment lapsed back under 2677.00.

Oh, and the decline extended down another 32 points to 2646.00. So, bearish?

Bearish behavior, for sure. But the reversal’s durability is a function of its origin and its sponsorship. Its catalyst was not simply a failed attempt to resume the rally. The open’s consolidation above 2677.00 had created a position of strength likely to probe even higher. A news headline prevented that, and more of the same news extended the reversal.

An artificial catalyst often crowds out organic sponsorship, which is then left unfulfilled. Monday’s decline didn’t gain traction, so gapping up above 2658.50 Tuesday could reverse the trend back up to probe fresh highs up to 2684.25. That said, and artificial catalyst can still be productive, so not yet reversing up through Tuesday’s open would next target 2635.00-2638.00.

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