Market Wrap (recording & summary)

A very narrow overnight range had dipped only slightly down to 2467.00 before Friday’s open. And only briefly, quickly bouncing back to earlier overnight highs testing 2492.00. The range persisted through the open, until optimistic headlines from a Fed speaker triggered a surge to 2508.00. Surges have been serving only one purpose, to stretch the rubber band so it could snap back down. It eventually snapped down to new lows at 2409.25.

The bearish WedEX’s afternoon influence is likely to repeat on Monday morning. Except for the impending weekend’s illiquidity, a hold-short was compelling. Evaporating liquidity ahead of a 3-1/2 day weekend also makes the setup less compelling, as one gentle upward push could trend higher through Monday’s early close.

Meanwhile, the bigger picture continues to unfold, whatever its scapegoats. Notice the accompanying chart. We began focusing on the bearish topping pattern long before tariffs and government shut-down were whispers, let alone headlines. The decline’s real culprits are the massively extended levels of many high-profile stocks long before they hit their highs. They were widely owned, by funds run by really smart inexperienced managers (i.e. theorists). How did the decline not begin earlier, and how is it not down more?

Be aware that a near-term low can appear at any time. Also be aware that a near-term low can be under Friday’s close by triple digits. And finally, be aware that none of that will happen during the next two days. Take advantage of the pause… chaRTroom will re-open Sunday night at 6:00 pm ET.

Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO SATURDAY REVIEW THIS WEEKEND.