Mid-day Update

Hyperbolic relentless rally probing new highs.

I’ve been repeating in the chaRTroom to reconsider stepping in front of persistently overbought 3-mijnute RSI. It is usually very unprofitable, except for one time, with many more points and much more time than expected in between. Today’s example is already 19 points  and three timing windows long.

Meanwhile, all “unfinished business above” is now fulfilled. At least, all that was required up to the 2220.00 objective which triggered two weeks ago above 2192.00. This afternoon’s 2222.00 bias-up target was exceeded in time to renew the bias-up signal, next targeting 2232.25, which is being pierced now by 2 points.

Until persistently overbought 3-minute RSI is undone, any reaction down would be only temporary. And it would likely target 2222.00. Otherwise, there is no requirement for a temporary dip, and room for noise above 2232.25  is 2235.25-2237.00.

Today’s only signal triggered above 2210.25, and no pullback limit has been violated. This isn’t the largest single signal we’ve ever traded, but it’s by far the largest single buy signal.

Post-open high attacking pre-open high.

Entering the bias environment in decline was still above yesterday’s lows. And it was produced by a late reaction down, from probing fresh highs. Weak-handed sponsorship behaves like this. Like yesterday’s mid-day downtrend, all within the open’s range. No traction.

Yesterday’s dip was recovered, and now this morning’s dip has been recovered, too. The lower-end of the range has been retraced to the range’s upper-end attacking overnight highs. Only attacking, stopping pessimistically short, which can be bullish from a contrarian perspective.

Meanwhile, this is the same area that produced the last downleg. And bias-up above 2207.00 just failed to trigger. There’s no downside requirement, but the bullish scenario would hover up here and await the bias environment lapsing to renew rallying.

Drifting back down would likely test 2203.50,and any lower would start to signal a deeper, lengthier pullback underway. Still likely to recover, but after an interim dip.

Is slow drift delaying the rally?

This morning’s 2207.75 renewed bias-up target held its test and retest, reacting down through the noon hour to 2201.50. Now a no-bias environment is fluctuating narrowly at the pullback’s lows.

Exiting the bias environment without already trending would be equally capable of resuming the rally, and of extending the pullback back into Friday’s range.

The latter would likely be only that, a pullback, since price action off this morning’s high has not been distributive. As for the former, probing above 2205.00-2206.50 would be likely to resume the rally, targeting a probe above last week’s highs.

Despite today’s (overnight) surge, no pullback is yet likely to reverse the trend down. Whether today or tomorrow, the rally is likely to resume. Only closing under 2187.50 would start to suggest differently.

UPDATE: I’m unavailable during today’s last timing window (which begins at 2:30 ET). There is no post-market Wrap or Saturday Review. It seems my connectivity has already become limited, and only the Daily Spot will be updated.

The 2191.75 sell signal held its test this morning. Probing it down to 2190.50 bounced back above 2194.00 to resume the morning rally. Room up to the 2197.00 bias-up signal was fully utilized. And despite the bias environment already lapsing when tested, its resistance held.

The morning rally, and the morning, both have ended. And another sell signal triggered under 2192.75.

Now this morning’s 2187.50 bias-down signal no longer need hold as support. But it’s trying. This afternoon’s 2189.00 bias-down signal triggered, putting into play its 2182.75 bias-down target. But touching 2187.50 has bounced to test 2189.00 as resistance.

The drop is likely to resume if the reversal isn’t recovered as the bias environment begins lapsing at 2:30 (when I will no longer be in front of the screens). And the bias-down target is just interim support on the way down to 2181.00.

Meanwhile, Gold (and Silver) and the Euro are threatening to bottom, if their earlier recoveries from this morning aren’t derailed. Could be very interesting into the close… Have fun!

Test of last week’s lows could end here, but need not.

This morning’s 2192.00 bias-down target was met to within 3 ticks, which excluded it from becoming “unfinished business below.” But no bounce ever gained traction to reverse momentum back up. And, anyway, retesting 2192.00 was always likely to also visit 2187.50 before any meaningful bounce.

So, trending down throughout the noon hour has extended to touch 2187.50. That’s also this afternoon’s bias-down target, and it held through 1:20, so the bias-down signal was not renewed. This is still a bias-down environment, and extending down anyway would next target “lower prior highs” at 2181.00.

 Still, the only bullish scenario from here would recover this afternoon’s 2193.00 bias-down signal when the bias environment starts lapsing at 2:30. Recovering 2194.75 during the bias environment would get a benefit of the doubt for already reversing momentum up, albeit not in an optimal way.

A terrifying characteristic was finally included, which this pattern’s template suggested should be part of the drop before it can end. And nothing has made this dip any less likely to recover. Recall that yesterday’s late drop extended down only after the position-squaring window had isolated a fresh low under 2199.75. Now this morning’s bias environment has also isolated its probe under the open’s 2194.50 low.

None of which prevents dips to lower lows. But their origins suggest that this stage of the dips is not strong-handed enough to prevent retesting yesterday’s highs. And probably also probe higher to fulfill the 2220.00 objective created by last week’s recovery above 2192.00.