Bias-parameters

[pay]The afternoon’s bias environment was probably “no-bias” since 1386’00 held its test as resistance, instead of “no-bias” which never enjoyed a clean break above 1384’50. The past hour’s “simple range” turned out to be 1 point lower than described earlier, from ESm 1386’00 down to 1380’50, with the lower-end probed just now by nearly 1 point.

This represents the area’s third test as support today – more so when including pre-open price action – and one more test during a relevant timing window should break lower to at least target recent lows and possibly resume last week’s decline. Back above 1384’50 and 1386’00 would be increasingly likely to trend up into the close instead.[/pay]

[pay]The ESm 1384’50 bias-up signal was exceeded in the final minutes before 1:20, but only momentarily. Ten minutes later it is still being retested as support. A break above 1386’00 through 1:30 would have confirmed the bias-up did signal, and some traders might consider using it for long-entry, but I am otherwise suspicious.

The next hour could simply range narrowly between 1382’00-1387’00. If there is anything potentially bullish about the pattern, and not necessarily indicative of being a corrective bounce, then it is 1) the noon hour’s low having bounced from a 61.8% probe back into the swing at yesterday’s cash session lows, and 2) bouncing out of the noon hour despite Crude Oil at session highs (decoupling, anyone?).[/pay]

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[pay]The ESm 1388’50 bias-up signal held its test through the 10:15 timing window to signal no-bias, and to require a test of the 1381’50 bias-down signal. The test was completed and recovered through the bottom of the hour. There hasn’t been any technical improvement so the potential for a bounce is based exclusively on the no-bias environment having fulfilled its test of the bias-down signal – probably back up to the 1386’00-1387’00 area with a stop under the bias-down signal.

Maybe there’s another catalyst, in that Crude Oil has bounced back to its 130’00 bounce limit. Its bounce accompanied the S&P decline, so reversing back down from 130’00 – as it now  should – would facilitate an S&P bounce. That said, I expect any near-term correlation to be overcome by a decoupling relatively soon.

Price action otherwise is entirely in-line with the interpretation of yesterday’s pattern as being only a corrective bounce, and that its attempted Pivotal Reversal did fail. RSI on a 3-minute chart did reach oversold so lower lows are expected at some point, and that adds risk to trading a bounce or holding onto it for too long.[/pay]

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