Market Wrap (recording & summary)
Quarter-end portfolio window dressing may have made a difference Friday, as the two-week ranging still sits atop a massive quarter. But open-to-close was little changed, if at all, as I describe below.
Meanwhile, Thursday’s 2820.25 cash session close was still overlapping 2019.50 to avoid qualifying as a recovery attempt. Friday’s session developed exclusively above 2019.50 to clearly qualify as a recovery attempt. Being recovered is the week-old close under 2013.00-2019.50 that signaled the trend is reversing down. A significant signal to have followed a week-long distributive pattern.
A recovery attempt, because trend change signals aren’t discarded easily. Neither are they triggered easily. Last Friday’s triggering close had required Monday’s second consecutive close to confirm. Similarly, this Friday’s recovery attempt requires its own confirmation, closing again back above 2019.50. Otherwise, the recovery attempt fails, and the trend change remains intact.
At least two setups are undermining the recovery attempt. Closing Friday at or overlapping its opening bar’s 2837.50 opening high reflects equilibrium. This setup often accompanies weak-handed sponsorship, which would suggest that Friday’s buyers won’t be attracting reinforcements on Monday. Friday’s “ineffectual optimism” also reflects weak-handed buyers — gapping up, ranging exclusively in positive territory, probing a fresh high, but not closing above the last prior high probed. Gapping up Monday can invalidate both bearish setups.
Overbought RSIs at 2840.00 were neutralized before the close. Which is not a sell signal, but removes an upside attraction that would have been a helpful reminder to the market coming out of the weekend. A lot of buying pressure was expended intraday, without gaining traction for the effort or leaving “unfinished business” above, so extending higher anyway would be bullish for at least attacking the recent distribution highs. Not extending higher Monday could already be gapping down sharply.
Details and other markets coverage are discussed in the post-market Wrap recording here.
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