Mid-day Update

Noon hour’s recovery attempt fails.

Retesting Sunday night’s 2883.50 low had become the next lower attraction, its objective being 2881.00-2882.00. which was pierced just after noon, and launched a noon hour bounce.

The bounce recovered up to 2895.25, twice including an interim 5-point dip. Then the noon hour’s exit resumed the same trajectory as its entry.

The 2880.00 bias-down signal was tested in time to invoke the grace period. When it triggered at 1:30, the 2873.50 bias-down target was being met to within 3 ticks. It has been probed down to 2871.00, with potential to 2870.50.

The path down to 2846.00-2851.00 remains intact. But the bias-down target has been met early in its window. Being down so much intraday with at least 1-minute RSI diverging positively at the low, be aware of the potential for a steep reversal up — probably only a temporary correction if it even develops.

Consolidating the morning’s recovery attempt.

The open’s blip-down to 2894.00 had reacted up sharply to test 2911.00. Forming a Rising Wedge from there greeted the bias environment at 2917.50. The window began lapsing at its 2924.50 high. Flat-to-lower ranging since then has held 2915.00 as support.

The market is still deep into negative territory from Friday’s close. It’s still at or above Thursday afternoon’s 2920.00 high. Its recovery would suggest that strong-handed buyers are targeting a retest of last week’s highs.

So, wasn’t 2920.00 recovered through a relevant timing window? This morning’s bias environment did start and finish lapsing above 2920.00 between 11:30-noon. But an interim dip down to 2917.50 still overlapped 2920.00, so its recovery is not complete.

Exiting this afternoon’s bias environment above 2920.00 or closing above it would still be credible. Until then, the recovery attempt is vulnerable to being reversed.

Gravitating higher.

Resistance at 2936.00 was probed momentarily during the first hour, above 2938.00. But it took a return to the opening range’s 2931.50 low for another probe above 2936.00 to extend. That attacked 2943.00, and its reaction tested 2938.00 as support.

But the bias environment’s exit recovered 2940.00, and the noon hour extended to fresh highs. Now this afternoon’s 2944.50 bias-up signal has triggered, targeting 2951.75. Already a fresh high is touching 2948.25.

Interim resistance in the 2950.00 area could challenge the path to 2951.75, or else it had better support a reaction down from 2951.75. If the afternoon continues drifting higher as Friday afternoons often do, the next higher objective is 2956.00. Meanwhile, a reaction down has room to 2941.75 before even beginning to suggest momentum is reversing down.

The last one was quickly invalidated.

This morning’s 2929.75 bias-up signal was recovered through 10:15 to trigger bias-up. It had not extended higher before dipping to 2928.00 at 10:30. The bars surrounding 10:30 were overlapping 2929.75, so we at least left the door open to resuming the rally. But its 2931.50 signal was only touched and not triggered.

A reversal’s 2928.25 signal did trigger, and it was very productive. Apparently reacting to word spreading that io another break in China trade talks, sharply lower lows at 2901.00 was tested while the bias environment lapsed.

Even if the morning’s bias-up were not invalidated at 10:30, it was invalidated by exiting the bias environment under its 2918.50 and 2911.25 bias-down parameters. So, its 2936.50 bias-up target is not “unfinished business.”

Meanwhile, rallying through the noon hour has now triggered bias-up again, back above 2912.00. The 2919.50 bias-up target is in-play. Already 2918.25 has been touched. Which is no assurance of extending any higher, and might instead risk having expressed too much optimism ahead of tomorrow morning’s Employment Situation report.

The only “unfinished business” above is Tuesday night’s “new Globex trend extreme” high, which is the least attractive hierarchically. Not recovering 2930.00-2934.00, and preferably 2935.00-2936.00, could be very vulnerable to a negative reaction.

Greeting FOMC from a pullback to support.

The post-open dip to 2947.00 was recovered before noon back up to the morning’s 2955.75 bias-up target. Its reaction trended down to fresh lows through the noon hour and tested this afternoon’s 2944.50 bias-down target by 1 point. Its reaction bounced up to test this afternoon’s 2950.50 bias-down signal by 3 ticks, which held its test.

This is a bias-down environment, and its bias-down target was already met. Its retest is in-play, but won’t become “unfinished business” if left outstanding.

Retesting the bias-down target is less likely with the FOMC events just minutes away and beginning during the bias environment. Greeting FOMC from beyond either end of the 2946.25-2949.50 range would be likely to react in that direction. In between is an unknown “no man’s land”.

Volatility tends to be excessive during FOMC policy statements and Fed Chair Q&As. Be sure to consider that greater degree of unpredictability in position-sizing and execution decisions.