Mid-day Update

Something big may be happening here… PLUS INSTRUCTIONAL VIDEO.

The likely objective to resuming last night’s rally was 2813.50. It was tested and retested at the morning bias environment’s high, very soon after triggering its 2808.75 buy signal. The window lapsed back under the open’s high.

The elements of this setup all but require a fresh post-open low. That’s the structural reward, just for isolating the bias environment’s probe above the open’s high. The calculable reward derives from the interim swing, and measures out to 2802.00. Neither objective is required, especially if another timing window were to probe fresh highs.

BONUS: Watch this 4-minute video description of the Risk:Reward assumptions that suggested selling into the 2806.75 bounce limit test on the way down.

But the reversal did extend down, until testing its likely 2802.00 target. Oversold RSIs there don’t require a retest because they printed during the noon hour. The low bounced 1 tick short of the 2801.25 bias-down target, but not high enough to avoid triggering the 2806.25 bias-down signal. Having met its target to within 3 ticks, it won’t become unfinished business if left unmet. But it’s meanwhile an attraction.

More so, the morning high’s rejection may yet evolve into a reversal of the overnight rally. Back under 2801.00 would start to signal another downleg underway probably targeting 2791.00. Otherwise, recovering 2809.00-2810.00 through a relevant window would suggest another upleg underway

No bearish influence, as prior highs attract price up.

Globex-flip did not influence this morning’s bias environment. The open didn’t gap up above 2788.00, and yesterday’s 2784.50 trigger wasn’t recovered through the open. Either of these would have told us Globex-flip’s influence had lapsed. Neither signal formed, but its influence lapsed anyway.

Meanwhile, the bias environment extended the overnight rally up to 2793.50, and then another point higher into noon. Pulling back to 2787.00 through the noon hour avoided touching the 2785.25 bias-down signal. It can still be tested during the no-bias environment.

Be aware of a couple of normal Friday afternoon behaviors. First, sponsorship for trending and especially for countertrending is difficult to generate. Second, exiting the bias environment under the noon hour’s high or a rally day is difficult to resume the rally. None of which requires reversing down, but that becomes the easier path.

Meanwhile, maintaining a break back above 2790.75 before the bias environment lapses could resume the rally. And the market is back in the orbit of Wednesday night’s 2798.00 “new Globex trend extreme,” which would be its likely attraction.

Opening drop retraced only back to the open.

The 2777.75 opening print quickly extended down to confirm the Globex-flip setup. That confirmation represented most of this morning’s drop, which got to 2769.00 before 10:15. There has yet to be a lower low, but the bias environment remained under pressure.

The noon hour recovered to test the 2777.75 open, attacking 2782.00. But the 2782.75 bias-up signal wasn’t even touched, and now 2777.75 is being probed as support.

Just avoiding an afternoon bounce — not necessarily extending down — would suggest the bearish Globex-flip influence will stretch through tomorrow morning, too. Any fresh low would next target 2753.00-2757.50. None of which even considers the Isolation setup, which would target at least 2730.00. But back above 2783.75 would start to signal a recovery underway.

FOMC Minutes coming shortly.

This morning’s upside held no surprises, other than there being upside. Trending was likely to be limited to 3-4 points, and that’s what was produced. An attraction at 2785.50 was touched, and its retest probed the 2786.00 bias-up signal before noon. Twice.

Reacting down through the noon hour reached fresh post-open lows, coming withing 3 ticks of this afternoon’s 2775.00 bias-down signal. Once again, like this morning, neither bias signal was touched while triggering no-bias.

For all of this volatility, price action remains within the range of yesterday’s final hour. Even reacting back up into the bias environment is now touching 2785.00. The bias-up signal is 2-1/2 points higher, coinciding with yesterday’s high. It should define the window’s upper-end if actually tested, which is possible in reaction to the 2:00 FOMC Minutes.

Reacting down to FOMC Minutes is also possible. Reliability is diminished when multiple timing windows overlap each other, along with durable trending. I would continue keeping smaller expectations for moves until the pattern proves otherwise.

Rejecting fresh highs wouldn’t be bullish.

This moring’s bias-down signal was tested and held through the open, but its offsetting test of the bias-up signal was held through the bias timing window’s grace period. This setup usually produces an offsetting test of the bias-down signal, despite it having been tested first. But not this morning.

Perhaps that’s because the setup I just described was triggered by the 1 tick. The 2777.25 bias-up signal was attacked to within only 1 tick at 10:30. Actually touching it would have triggered noN-bias, which is more how the morning developed — shallow 5-6 point backing-and-filling that waited for the window to lapse.

And when the window began lapsing, the post-open recovery resumed. Surging 10 points from 2774.00 tested the morning’s 2784.00 bias-up target that I had suspected would be met anyway, but for having expended so much buying pressure so quickly this morning.

2784.00 has since held another 5-point pullback. Resolving up again is possible, all but marginalizing sellers for the day and confirming the trend remains up. Otherwise, fresh afternoon lows under 2778.00 would start to signal another rally effort had failed. Closing negative — if not also under this morning’s lows — would form a bearish Pivot Reversal unlikely to delay extending down.