Mid-day Update

Another narrowing range.

This morning’s recovery had attacked the 2266.00 bias-up signal. It didn’t trigger, but did define the window’s upper-end. Its lower-end was a dip down to 2261.50.

Several more bounces each have returned down to 2261.50. The interim bounces are lower and lower, forming a Descending Triangle. The pattern was free to break lower coming out of the noon hour. That window came and went, with 2261.50 holding as support.

Beige Book is scheduled at the top of the hour. I can’t attribute the hesitation to its impending release, since it hasn’t been that influential for awhile. Anyway, the narrowing range began too early for it to be associated directly.

Maybe it’s the final hour’s scheduled appearance by Fed chair Yellen. Finally releasing the Beige Book data could be enough to allow some reaction. But I would be concerned about the lack of volatility if the session ends with this range persisting.

Narrow, dull ranging.

This morning’s recovery up to 2267.25 had failed to trigger the 2266.00 bias-up signal. Any higher any later (or earlier, since the signal triggered late) would have extended through Friday’s highs.

The 2260.75 bias-down target was tested already, so it didn’t require a retest. And it didn’t t become unfinished business below. But the noon hour didn’t exploit that with a rally, and only ranged narrowly.

That ranging has only narrowed. Now the afternoon bias environment triggered no-bias, too. Which keeps alive the potential for probing fresh post-open lows, anyway.

Fresh lows aren’t required. Neither is a rally. Apparently, a pulse isn’t required, either. The narrow range does suggest the first trending attempt will be a false break, likely to then reverse more substantially in the opposite direction. In any case, not a great trading environment until this range is broken.

Open’s surge has backed-and-filled, after all.

An opening surge of such great proportion would typically back-and-fill into the afternoon, on any other day except Friday. Today’s post-surge action hovered just under its high. The no-bias seemed suspiciously noN-bias when it triggered, and hovering was a typically noN-bias characteristic.

But also typical for noN-bias hovering is to exit the bias environment trending through the bias signal. That didn’t happen. Only another brief dip to a fresh low — still above yesterday’s range.

A durable downleg would have begun already. So, a later downleg would likely recover. No downleg is required, and neither is the rally required to resume. But resuming the rally this afternoon remains the likelier resolution.

Big rally off of morning lows is still negative.

Resuming the pullback to probe under Wednesday morning’s lows meant the next likely opportunity for a low would be Thursday afternoon. It’s now Thursday afternoon, and the afternoon bias environment is now lapsing.

The noon hour was already greeted rallying off of the morning’s 2248.50 low. Extending higher through the noon hour triggered bias-up, and its 2263.50 bias-up target is now being tested.

That’s 17 points of buying pressure, and its rally is only probing above the 2264.50 open. Which was itself a 6-point gap down. And while the rally is back above yesterday morning’s 2255.00-2257.00 prior lows, no prior high has yet been recovered. A lot of buying pressure to expend, only to still be in negative territory, fulfilling a target. Did I mention RSIs are deteriorating? No? RSIs are deteriorating.

Extending higher from here essentially requires immediately exploiting a few favorable factors. The recovery is an uptrend of higher highs and higher lows, which doesn’t reverse down on a tick. And, potentially, entering the final hour above the bias environment’s 2264.00 high would gain traction, and make reversing down today more difficult.

Above 2266.00 (being attacked now) could almost literally explode higher. Back under 2261.25 would start to suggest momentum is reversing back down.

Unexpected comments trigger massive volatility.

Trump commented this morning on drugs costs. It was immediately influential and very productive, sending price down quickly and a lot, from testing 2266.00 down to 2255.00.. It was also arbitrary, and ultimately recovered back to its origin.

A bigger detour like yesterday morning’s bounce was trying to trigger when the comments were made. The drop’s complete recovery didn’t resume the rally attempt where left off. Instead another drop has triggered (and already fulfilled) this afternoon’s 2262.00 and 2256.75 bias-down parameters.

Recovering Trump’s artificially-induced downleg was all but required. Resuming the leg preceding it is not required, at all. But it can be. The morning’s 2261.25 bias objective was fulfilled by the Trump plunge along with its 2257.50 bias-down target. This afternoon’s bias-down already met its 2256.75 target. And the pullback had potential to bottom Wednesday morning.

We still don’t know whether Tuesday morning’s bounce may have extended the timing for a pullback low to Thursday afternoon. Or whether its objective may have extended down to 2247.50, if not also 2235.25. Any fresh low would suggest as much. But rallying this afternoon instead of extending the pullback would suggest it had ended, with new highs in-play.