Bias-parameters
Bias-up target “met” within 1 tick.
Hand grenades, horse shoes, and… limit orders? No?
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1296.25 was attacked within 1 tick. A reaction down probed its two recent pullback limits. After bouncing to the higher limit at 1294.50, fresh lows just probed the third recent pullback limit at 1292.50.
Just revisiting the lower pullback limit at 1294.00 already signaled the upleg had lost its momentum. It was a productive pullback limit, and probing it by more than 2-3 ticks signaled momentum reversing down.
The bias-up environment inhibited the first dip from gaining traction. But now the bias-up environment’s end is in sight and 1293.00 has been broken down to 1291.00.
Still, it’s tough acting on a sell signal before 11:30. And it’s tough acting on a break under 1293.00 after already having pierced it. The next lower actionable candidate is a break under 1291.00.
In fact, exiting the bias environment back under 1291.00 would prevent its 1296.25 bias-up target from remaining intact. It would not be unfinished business above. I’m otherwise reluctant to sell with unfinished business above.
Holding 1291.00 as support would allow this dip to be bullish for discounting a negative reaction to this afternoon’s FOMC announcement.
Otherwise, the bearish path of rejecting probes of prior highs would only need to close negative for confirmation. And as described in this morning’s Market Tour, closing negative in this pattern would likely close very, very negative.
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