Most market activity is “noise”. This is a necessary function of the trade facilitation process of an auction market. The “filter” is the larger degree of development in which the noise is occurring. From a trader’s perspective the question to be answered is has the market changed its primary present state (has the larger degree of the migration of VALUE changed).

From this perspective the answer to the question: “Did Thursday evening’s/Friday morning’s sturm and drang change the larger degree of development from up to down in the US stock indices? – is no. Most of the “noise” occurred in the night session before the US day session began. The US day session was the yawner most US day sessions have become, with a range of 12 points in the S&P mini contact and 21 points the S&P cash contract, neither of which was a big deal relative to recent wide range days.

From an Auction Market perspective what would signal a problem for the longer term bullish assumption? The initial signal of problems (for bulls) would be a close below 1411, basis cash (S&P 500), and below 1411, basis March futures (S&P 500 mini – ES). See charts below.


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