Market Wrap (recording & summary)

Wednesday’s gap down created a position of weakness, since the prior afternoon’s bounce had gained no traction. If a rally were attempted, it would be doomed to failure. Tuesday’s 2823.00 opening gap up wanted to be filled from below, and the open surged up to 2826.00. But its reaction down to 2819.00 was recovered entirely by noon. Hint.

Retesting Tuesday’s 2831.25 high up to 2836.00 was also possible, as discussed during the Market Tour. The rally extended to touch it upon exiting the afternoon bias environment. A deep enough reaction down would have been bearish. Instead, its reaction down held above Tuesday’s 2831.25 high to avoid reversing momentum down. Hint.

Timing isn’t everything, but it’s a lot. It was certainly the most important thing when Trump announced a tariff deal with the EU. The shallow pullback had not reversed upside momentum, so the position-squaring window created a vulnerability to a short-squeeze. That’s the setup, which Trump’s announcement then spiked over the net.

The market spiked up 18 point to 2849.50 before the cash session close, and futures dipped back down to 2840.00. The second consecutive close above 2818.00 confirms a new rally leg underway, requiring at least an eventual third higher close. Closing back under 2821.00 would negate the objective. The bullish context and the proximity to January’s highs could create turbulence Thursday morning. But trending Thursday afternoon through Monday morning is likely.

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