Mid-day Update

Bias-up target met, holding.

This morning’s 2351.00 bias-up signal triggered late, but cleanly, probing the 2354.00 pre-10:15 high through 10:30. Its 2357.50 bias-up target was pierced by 1 tick as the bias environment began lapsing.

That’s step-one, both for a rally and for a new downleg.

Recovering to 2357.50 rewards buyers that absorbed the post-open dip attacking 2344.75. Extending the recovery would suggest it is attracting new sponsorship. Meanwhile, the reward has satisfied near-term buying pressure, making price vulnerable to falling.

Thursday afternoons are often paralyzed by anxiousness ahead of Friday morning’s Employment Situation report. Yesterday morning rallied bravely ahead of the afternoon’s FOMC Minutes, and suffered the consequences. Memories may be the recovery’s biggest challenge here, but the market will rally if it wants.

FOMC reaction offers a correction.

This morning’s doubly-renewed bias-up target at 2374.25 was touched, pierced by 3 ticks at this morning’s high. Its reaction down wasn’t shallow after all, triggering a pattern that targeted 2365.00. Touching the target has reacted back up, recovering all but 1 tick of this morning’s rally.

That’s a lot of optimism ahead of this afternoon’s FOMC Minutes. It’s also pessimistically short of actually touching the high. And now a pessimistic knee-jerk reaction to the news has attacked 2369.00 as support, which was this morning’s renewed bias-up target.

A little deeper pullback has room down to 2367.75 before starting to signal momentum actually reversing down. Meanwhile, the high requires a retest, probably up to 2377.00. Just closing above 2369.00 would all but ensure the next major objective in-play to probe new highs. Closing under 2369.00 would make the rally fragile, again.

Morning dip retraced.

Did this morning’s dip leave a lasting impression? Yesterday afternoon’s buyers gained traction, so they’re capable of absorbing a reaction down. In fact, the morning ended unchanged from yesterday’s close(s).

So, this morning’s drop was retraced entirely to unchanged. Did buyers absorb it? And since the 2349.75 bias-down triggered, is it now absorbed?

Tough call, but probably not. Still overlapping the bias-down signal at 10:30 prevented invalidating it. And despite being higher, the bias environment lapsing at 11:30 was still overlapping the open’s 2354.50 high. Higher still at noon, and still overlapping.

Bias-down triggered cleanly. But although it hasn’t since extended, neither has it been rejected cleanly. The 2344.75 bias-down target becomes “unfinished business below.” Another interim rally is possible, especially so long as 2352.75 holds as support. But back under 2349.75 could resume the morning’s decline.

Bounce stops short of reversal signal.

There is no further unfinished business below. This morning’s 2350.50 bias-down target was met, which was triggered under 2357.75. Tuesday morning’s no-bias trending above 2342.25 had required a retest. It was probed during the noon hour down to 2340.00.

Now a bounce has held this afternoon’s 2349.75 bias-up signal. No offsetting test of its bias-down signal is required. Entering the noon hour above 2350.50 would have been optimal, anyway.

Backing-and-filling during this afternoon’s bias environment could still resolve up into the close. Closing back under 2342.25 would instead put into play 2321.00 and probably also 2311.00 below.

Upside momentum persisting through the noon hour.

This morning’s 2258.25 bias-down signal was attacked to within 1 tick. Not touched. So, no offsetting test of its 2266.25 bias-up signal was put into play. Not officially. But its test was still likely for other reasons that had marginalized sellers.

If tested this morning, 2266.25 was required to define the no-bias environment’s upper-end. But it wasn’t touched.

2266.25 is this afternoon’s bias-up signal, too. It was being attacked to within 3 ticks at 1:20. Not triggered, not touched in time to invoke the grace period, and not exceeded at 1:30 to invalidate its no-bias.

If tested this afternoon, 2266.25 should define the no-bias environment’s upper-end.

Actually, it’s being tested now. Still being overlapped, which qualifies as defining the upper-end. So it’s not “no-bias trending.” It’s possible — we can go weeks and weeks without any no-bias trending, and we’ve had two already this week.

Trending higher after the bias environment begins lapsing at 2:30 would be credible for extending higher into the weekend. Meanwhile, a shallow pullback could slow-play the rally until that path higher clears. But back under 2362.00 would start to suggest momentum is reversing back down.