Mid-day Update

Morning’s objective still outstanding.

Holding this morning’s test of its 2356.75 bias-down signal put into play an offsetting test of the 2366.00 bias-up signal. The morning’s 2363.25 high was corrected down to 2358.00, and now the morning’s high is being attacked.

This afternoon’s 2362.00 bias-up signal didn’t hold or trigger. This is a noN-bias environment. The setup doesn’t encourage rallying, but neither does it prohibit it.

Hovering around 2362.00 until the noN-bias environment starts lapsing often behaves as if the bias was just signaled. The bias environment can’t dip too deeply to maintain that potential.

Extending higher would target a probe above yesterday’s highs. It would not require closing any higher. Yesterday’s two reactions down help to explain the hesitation in recovering already. But fresh highs remain likely so long as 2358.50 now holds as support.

REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.

Persistently overbought 3-minute RSI kept alive this morning’s rally. It ultimately came within 1 tick of the 2365.00-2366.00  renewed bias-up target. Close enough for hand shoes and horse grenades. But a loose end, if left outstanding.

The high doesn’t require being retested. The 3-minute RSI’s persistence had already broken, dipping momentarily out of overbought territory. And its 1-minute RSI was at best on the cusp of being overbought. But the burden of proof is on sellers, because the open’s rally wasn’t rejected through two timing windows — a downdraft could still  recover.

In fact, there was a downdraft. It hasn’t extended, nor has it recovered. The highs formed a head & shoulders that triggered a sell signal under 2360.25, and met its minimum 2357.25 target down to 2356.00. A relatively narrow 2-point range between 2358.00-2360.00 defined the noon hour.

Breaking higher would set-up an important test of the morning’s high. Closing above it could turn this rally’s slope exponential. More exponential. Breaking back under “lower prior highs” would trigger a steep and deep drop, albeit only temporarily.

Rally pauses for another no-bias.

This morning’s bias environment neutralized both the offsetting test of this morning’s 2342.00 bias-down signal and yesterday’s “unfinished business below” at 2342.25. That was done during a plunge from 2347.75 that eventually touched 2336.75.

But no-bias had already triggered. Probing under this morning’s 2342.00 bias-down signal during a no-bias environment is “no-bias trending.” It requires bouncing back up to at least 2342.00, if not also to the 2344.00 10:15 print. Both were tested during the noon hour.

The bounce also attacked this afternoon’s 2345.50 bias-up signal to within 1 tick. No-bias has triggered again. The 2339.75 bias-down signal was attacked into 1:30, but held. Probing under it could still test fresh session lows, once again as “no-bias trending” that would require recovery.

Without there being an objective in-play, and without first testing an extreme, price action through the close may otherwise be less predictable.

Trump picks up Yellen’s slack to trigger surge.

Great scene in Hunt for Red October, when it is saved from guided torpedoes by submarine Dallas attracting them away. President Trump played a similar role this morning by touting massive tax cuts, after Yellen’s comments fell flat as was expected.

The 2336.50 bias-up signal had been attacked, but not touched before reacting down to 2333.00. No-bias triggered, but no downside was required, and sellers weren’t gaining control. This increased the potential for no-bias trending, targeting at least the 2340.00 overnight high. A probe higher did begin, and extended to touch 2343.00.

No-bias trending requires a retest of the un-triggered bias signal. Plunging into the bias environment exit came within 2 ticks of the morning’s 2336.50 bias-up signal. Its attraction below is now neutralized. It was quite a novelty — and perhaps foretelling — having “unfinished business below” for a change.

Overbought RSIs at the 2343.00 high still require a retest, which is being threatened now. The 2342.25 bias-up signal held two tests to avoid triggering. So, probing any higher could also be no-bias trending, and it would also be doomed to failure. Back under 2338.00 at any time would point back down.

Targets being met faster than they’re put into play.

Two more probes under the 2321.50 bias-down signal during this morning’s no-bias environment both recovered. The bias environment exit was above the pre-10:15 low, so an offsetting test of its 2330.75 bias-up signal became “unfinished business above.”

That was as-of 11:30, when this morning’s bias environment started lapsing. Now the afternoon’s bias environment is triggering at 1:20, and this morning’s 2330.75 objective is already being tested. So is the overbought RSIs from yesterday’s 2329.00 high, and its 2331.50 bias-up target left outstanding.

Even faster, as this afternoon’s 2327.00 bias-up signal is triggering, its 2332.25 bias-up target is already met. Too much, too fast? Well, not exceeding the bias-up target at 1:20 has failed to renew the bias-up signal.

It’s still a bias-up environment, so the rally is free to extend. But often it doesn’t, not when the target holds its test through 1:20. Overbought RSIs at the 2332.75 high do require a retest. Extending higher anyway could put into play 2343.00-2347.00.

There’s otherwise room back down to the 2327.00 bias-up signal during the bias-up environment. Breaking under it as the bias environment lapses could start sealing a top.