Mid-day Update

The downtrend persists.

Not recovering intraday above 2124.25-2125.00 resistance was likely to probe under Friday’s 2112.50 low. The open didn’t have to actually be at resistance, but it was. And post-open action trended straight down.

The 2111.25 late bias-down target was attacked as the bias environment began lapsing. And it was met as the noon hour was entered. Having probed fresh trend lows, a bottom was free to begin forming.

Or, not.

The next lower target of 2105.00 was just attacked to within 3 ticks. It’s also this afternoon’s bias-down target, yet to be triggered, but it won’t become “unfinished business below” having attacked it to within 3 ticks. And RSIs have been making higher lows — higher oversold lows, but during the noon hour, which doesn’t require a retest.

Back above 2108.75 would start to signal momentum reversing up. The signal was just touched while testing the current bounce limit. If a recovery doesn’t catch, then the next lower targets are 2095.00 and 2082.00.

Dry cleaners morning seems to contagious.

This morning’s bias environment suddenly plunged from 2125.25 and tested 2120.00 several minutes later. That ended quickly, as the balance of the window firmed back up to 2125.25.

Then an interesting thing happened: The bias environment began lapsing by surging to fresh post-open highs. That ended quickly, too, retesting the morning’s “lower prior highs.”

Interesting. Productive sponsorship between timing windows is rarely overwhelmed. So, surging to fresh highs as the bias environment began lapsing should have extended. But it did not. Even knowing the likely resolution is down, and that fresh lows must precede any credible rally — something interesting was attempted.

I’ll have to dismiss it for now. Its inflection point was validated by immediately extending at least 5 ticks. But its 3-minute high never improved. And now another timing window’s entry has signaled a reversal down.

So, the noon hour’s probe down to 2123.50 is being retested by 1 point as the afternoon’s bias environment begins. It’s triggering “no-bias” without either bias signal having been tested. Trending out of the bias environment lapsing would be credible again. That late would be difficult for a rally today to reverse back down today, but no rally should be durable without first probing under Friday’s lows.

Overnight lows already retested.

The durability of this morning’s rally was undermined by not having isolated the overnight probe under yesterday’s lows. That essentially validated sellers. “No-bias trending” above the4 2131.25 bias-up signal had room up to its 2137.50 bias-up target. But even that would remain vulnerable to reversing back down to retest the 2116.00 overnight low.

Well.

I had almost completed an update reiterating those points when the FBI announcement preempted me. The news also preempted touching this afternoon’s 2135.50 bias-up signal by 1 tick. And that was still several ticks short of the potential.

The reaction down was not optimal, but it fell to 2120.00, 2114.00 and eventually 2112.50. RSIs were already diverging positively, and finally a bounce is attacking yesterday’s 2122.50 post-close low.

Not impressed.

There’s room up to 2127.00-2129.00 without even suggesting the trend is reversing up. And meanwhile back under 2118.00 would resume the decline, next targeting 2105.00 and 2095.00, even 2082.00.

Morning slide bounces, to a degree.

The first hour’s slide to 2126.75 held the 2129.75 bias-down target when it mattered, and avoided renewing the bias-down signal. The balance of the morning’s no-bias environment was supported appropriately by 2129.75.

The 2132.50 bounce target was fulfilled just as the bias environment began lapsing. Bounce potential to 2135.75 was fulfilled during the noon hour. Its resistance held.2135.75 is also this afternoon’s bias-up signal. It did not trigger, and this is another no-bias environment. But there is no requirement during the afternoon for this setup to produce an offsetting test of the other bias signal.
This pattern off the lows tends to produce another surge, similar to the noon hour’s entry. Actually trending up to fresh highs — or down, for that matter — is difficult with two high-profile post-close earnings items coming from AMZN and GOOGL.Resolving up would help very much to reduce the ongoing vulnerability of a fresh session low triggering a much greater downleg.

Pullback holding support.

This morning’s late rally above 2127.75 was resisted initially at the 2133.50 bias-down signal. Being resistance during a bias-down environment didn’t prevent probing above it to 2140.00. But probing above the bias-down signal during a bias-down environment required at least retesting 2133.50 as support.

2140.00 happens to be natural resistance. It is a 61.8% retracement back up to yesterday’s pre-open 2150.00 test. Overbought RSIs that formed at 2140.00 require its eventual retest. That’s possible at any time since its reaction down just fulfilled the minimum downside objective by testing 2133.50.

Trying to retest this morning’s high would get every benefit of the doubt for trying to resume the rally. There is resistance above at 2145.75, unfinished business at 2148.00, and then a likelihood of probing yesterday’s 2150.00 pre-open high.

Until rallying, there is currently potential for extending the noon hour’s pullback through 2133.50. This morning’s 10:15 print at 2127.75 could be tested, regardless of the resolution.