Mid-day Update

Is the pullback already done?

A test of this morning’s 2376.00 was put into play by holding a test of the 2384.00 bias-up signal. It was soon fulfilled, and then probed down to 2373.75 as the bias environment began lapsing. But 2376.00 was recovered as the bias environment was fully exited into the noon hour.

Failing its timely recovery would have extended the drop. A usual objective is back to the origin of any FOMC reaction. That would be 2370.50. And any sell signal would put it  back into play.

The noon hour’s bounce to 2380.00 has reacted down to attack 2376.00. This is a no-bias environment with no attraction, but trending would be credible when it starts lapsing. Back under 2376.00 or above 2378.75 would be credible for extending in that direction.

Waiting for a bias.

This morning’s probe under the 2358.00 bias-down target came too late to renew the bias-down signal. It was probed anyway, but several minutes earlier would have essentially targeted a complete retracement back down to last Thursday’s 2351.00 low

The probe under 2358.00 was actually a steep drop, and it extended down  to touch 2355.00. That was the minimum qualifying retest of the structure at Thursday’s low. Its reaction up attacked 2364.00, retracing the open’s sell signal.

And it peaked at noon. A sudden plunge probed 2358.00, which the noon hour’s exit recovered up to 2361.00. But that’s short of triggering the afternoon bias-up. Back under 2358.00 would suggest 2351.00 is in-play anyway.; Back above 2364.00 would confirm the pullback had ended.

Range bound morning is bleeding into a range bound afternoon.

This morning’s no-bias environment was entered without touching either bias signal. Not maintaining the open’s surge had marginalized the upside. That didn’t necessarily default to requiring a drop, but it allowed room to test the 2365.50 bias-down signal as support.

The bias environment started lapsing at 2365.50. Its reaction had room up to 2370.00 before starting to signal a new upleg underway. That’s where the reaction’s bounce peaked.

Now this afternoon has triggered no-bias. Without first touching either bias environment. Again. The “dry cleaners morning” appears to have bled into a dry cleaners afternoon.

Actually, that constraint can resolve when the afternoon bias environment begins lapsing. A rally would become possible. Neither resolving nor rallying is required. And nothing in the pattern prohibits another drop that retests Thursday’s 2351.00 low.

Bias-up environment’s lapse hasn’t been bullish.

The post-open pullback held one test of the 2365.75 bias-up signal. Then it was probed by 2 points, but only briefly as that also held through the bias environment.

Then the bias environment lapsed, and 2365.75 was no longer required to hold tests. The next test came during the noon hour, and quickly extended to test this afternoon’s 2359.75 bias-down target.

The bias-down target held its test to avoid renewing the bias-down signal. It’s still a bias-down environment, and remains vulnerable to extending down anyway. The eventual objective would be to retest oversold RSIs at yesterday’s 2351.00 low. Probably not as one leg, i.e. not as an air pocket.

This being a Friday afternoon, sponsorship for trending tends to be difficult to attract. So, recovering back above 2365.00 would start to suggest momentum is reversing up. The next higher objectives starting at 2377.50 need not be tested today.

Ranging gets blind-sided.

Recovering into and out of the open hasn’t amounted to much. Stopping 1 tick of the morning’s 2366.50 bias-up signal prevented putting into play an offsetting test of the bias-down signal. But the no-bias environment and noon hour only ranged +/- 2 points around 2363.00.

And now a headline has triggered a 5-point plunge to probe the post-open low, 2 ticks short of the 2357.50 bias-down signal. This is during another no-bias environment, so the low’s retest could serve as this window’s low.

Retesting the low can also serve as a bottom, but will it. It would be the first post-open print under yesterday’s low. The open had isolated the overnight lows, which is not a buy signal, but good soil for one.

Anxiousness ahead of tomorrow’s Employment Situation report may inhibit trending this afternoon. So, trending back up to this morning’s highs is likelier than breaking lower. However, exiting the bias environment and still defending against a break lower ahead of news would be difficult to recover.