Friday’s sellers all but disappeared… by Sunday night. After retracing all of Monday’s bounce, it would seem that they have returned — and they brought friends.
Pattern points… (Setups and technicals)
Monday’s bounce was always about refueling sellers. It was unknown whether its peak would wait until Tuesday. We still don’t know, despite the last hour’s 8-1/2 point dive from 1382.75 down to 1374.25.
We don’t know, because of one of the late decline’s main causes, itself. That is the attraction back to unchanged at Friday’s 1375.00 Globex close.
Several of the first hour’s checkpoints each returned to 1375.00. The morning was exited back at 1375.00. So it should not be surprising that once the afternoon’s 1382.25 bias-up target was met, 1375.00 attracted price down to it again.
1375.00 wasn’t revisited until after the cash session close, but a lot of selling pressure was expended just to attack it. The drop doesn’t need a fresh low to resume — a sell signal already triggered at 1380.50. But 1380.50 could be retested first.
What’s Next… (Outlook and opportunities)
Monday’s close was under March 29’s 1386.25 prior low. It was the first close under a prior low since March 6. Not recovering 1386.25 Tuesday would confirm the trend has reversed down. Closing Tuesday at fresh lows would be optimal confirmation. Recovering instead would all but ensure resuming the rally to new highs.
Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.