Market Wrap (recording & summary)

Wednesday morning’s delayed surge up to 2826.00 offered a high-probability short. No-bias trending above 2823.25 was already likely to fail, especially with the afternoon’s FOMC event inhibiting sponsorship. Its reaction’s 2815.00 target was exceeded by 61.8% down to 2808.00.

So, question: Was that defensive posturing successful to help absorb an initially negative knee-jerk reaction to FOCM? Price had only firmed into the FOMC, so optimism wasn’t excessive. A delayed reaction dipped to 2805.50, ignoring potential for another point lower before bouncing to 2817.00. So, short answer: The morning’s discounting helped.

Longer answer: It probably didn’t help enough. The afternoon’s recovery was unimpressive — perhaps inhibited by a White House announcement re:China that never materialized. Unlike Tuesday, 2817.00 was only touched and not recovered, which keeps the pattern vulnerable to dipping deeper. In fact, there’s already a 9-point drop into and out of the close.

Whether 2804.50 or a deeper probe under 2801.50, isolating fresh lows to the overnight could seal a near-term bottom. Gapping up above 2820.00 would be credible for extending higher, too — difficult, but credible. Meanwhile, Thursday’s close determines whether Friday’s Employment Situation report is greeted from a position of strength, or weakness, which could be a landmark for near-term direction.

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