Market Wrap (recording & summary)

Wednesday was greeted by multiple instances of excessive optimism that I detailed in the pre-open Market Tour. None of which would necessarily prevent retesting the 2961.25 overnight high’s “New Globex trend extreme.” But they did. The high was only attacked again intraday to within 5 points. Twice.

Monday’s “unfinished business” above at 2954.25 had been met overnight, but it was also Wednesday’s open. A couple of big downlegs eventually touched 2943.50 at the noon hour’s low — stopping optimistically short of Tuesday’s unfinished business below at 2941.50. Down 20 points from the overnight high, and still showing signs of optimism.

Greeting the FOMC policy statement from just above 2949.50 was likely to extend in that direction, and returned to the morning’s 2956.00 high. Despite probably being only obligatory resistance, it was still resistance. And its test coincided with the Fed Chair’s Q&A, which evoked quite a different sentiment — reacting down 17 points to 2939.00.

A compelling hold-short would have been considered on a close under 2935.00 with the likelihood for gapping down to 2919.50. But the close had dropped already to 2924.50, reversing the odds. Post-close action has already extended down to 2916.00.

A lot can happen overnight. Recovering 2930.00-2934.00 would be big, but a retest of Tuesday night’s highs requires recovering 2949.75-2950.50. If this were Friday, then extending down sharply intraday would be very likely, but it’s at least still possible. There’s room down to 2910.00-2911.00 without yet falling over the edge, but it’s a very difficult level to recover from.

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