Mid-day Update

Afternoon shifting between influences.

This afternoon’s bias environment shuts the door on two of this morning’s bullish influences, and opens the door to another.

The bullish Globex-flip setup triggered easily. Its influence applies either to this morning, or else through the following morning. The difference is identified during the interim afternoon. If this afternoon extends the rally, then it’s likely also to extend the following morning. But not extending the rally this afternoon would leave the following morning without the Globex-flip influence.

This morning’s other bullish influence is a usual Friday Factor. The morning’s bias signal tends to persist through the noon hour on Fridays. This morning’s bias-up was renewed. That didn’t translate into extending the trend, but a reversal was avoided. That inhibition is now done.

The opposite of bullish is not “bearish.” It is “not bullish.” Bearish requires its own signal. Enter the bearish WedEX.

Thursday’s gap down held under two prior relative lows to invert Wednesday’s bullish WedEX by proxy. The setup became bearish. Its influence spans Friday afternoon through Monday morning. Had the overnight rally extended higher this morning, I wouldn’t be surprised at the setup failing. It may yet, but all of that overnight buying pressure failing to extend post-open leaves the door below wide open — even without the bearish WedEX.

Meanwhile, notice the difference between NQ and ES in the nearby charts. Even the overnight rally is not broad. This afternoon’s bias-up didn’t trigger, despite being attacked to within 3 ticks during the noon hour. If trading a buy signal this afternoon, consider using smaller unit sizes and/or shallower targets.

REMINDER: This being a holiday weekend, there is no Saturday Review. Be sure to make stock chart requests by this afternoon.

Post-open paradigm shift hasn’t shifted back.

The opening action was impressive. As in, it made an impression. Two of them, both with the same setup — opening back under Tuesday’s last relative lows at 2838.75 and 2841.50. Maintaining their break through the opening 15 minutes of volatility formed an anchor, so that reacting up has come from a position of weakness. Meanwhile, the same opening action inverted the WedEX signal to passively bearish by proxy.

The position of weakness didn’t prevent the morning’s bounce 18 points from 2730.25 up to 2748.25. Its reaction down to 2735.50 was reversed up 20 points through the noon hour to 2755.25.

Flat-to-lower narrow ranging still managed to trigger the 2747.75 bias-up signal, while also holding a test of its 2753.00 bias-up target. It’s still a bias-up environment, and back above 2755.75 would start to signal a bigger rally underway.

Otherwise, topping should still close back under 2751.00, or at least overlapping it, but preferably back under Tuesday’s last relative lows at 2838.75 and 2841.50.

Late-morning slide still hovering above yesterday’s highs.

The 2755.00 bias-up target had been probed up to 2762.00 during the open. But it was only being overlapped at 10:15 which didn’t renew the bias-up signal. The earlier high was attacked to within 1 point, and already drifting lower when a headline (Rubio’s buyback tax proposal) triggered a steeper, deeper slide to 2748.00.

Exiting the bias environment above 2755.00-2757.00 would have gone a long way to suggesting the bear market rally was something more. Reacting down instead doesn’t default to being bearish. Two more timing windows have now elapsed without even probing back into yesterday’s range.

Hovering above yesterday’s range is potentially bullish, but optimism becomes “ineffectual optimism” as more time elapses without exploiting the posture.

The noon hour ranged back up to 2753.00, which is being tested now. The afternoon’s no-bias environment could test its 2757.00 bias-up signal just as noise. But back under 2749.50 would start to signal that buying pressure was fully expended, and another downleg was getting underway.

A seasonal timing window may be rushing to fulfill upside.

The open’s rally peaked at 2735.50, but none of my measurements justified that being the rally’s end. Room for a pullback down to 2730.00 was fully exploited before price began firming. Firming, and then surging to 2742.00 before the bias environment began lapsing.

Flat-to-higher ranging through the noon hour attacked 2745.00, fulfilling the rally’s next higher target at 2743.50. Reactions down held 2739.00, and now the afternoon’s bias-up has triggered late. The rally’s next higher target at 2751.00 — which is also this afternoon’s bias-up target — is in-play.

RSIs are now overbought at the current high attacking 2747.00 to require that any immediate dip be recovered. Back under 2742.00 could be difficult to recover.

Wednesday is the wek’s most liquid, and the most predictive Wednesdays precede expirations and 3-day weekends. Counter-trend sponsorship ahead of 3-day weekends is difficult to generate after Wednesday. Fulfilling the 2751.00 target without putting into play a higher objective could be difficult  to reverse back down.

Late-Friday and Sunday surges yet to repeat.

The 2714.50 open was already backing off from attacking the 2721.50 overnight high. Post-open action channeled down to 2703.75, holding a test of this morning’s 2704.50 bias-down signal. No unfinished business below left outstanding.

The relevant 2708.00-2709.00 area that had held Friday’s late surge was probed as support repeatedly this morning. But every leg only overlapped the area, never breaking lower. Sellers haven’t gained traction, but buyers fail to exploit it. The noon hour’s bounce up to  2712.00 held. Its reaction is retesting the 2708.00-2709.00 area’s lower-end.

This a no-bias environment. Neither of this afternoon’s 2702.75-2713.75 bias signals was touched. If touched, either bias signal’s test should define that end of the range. Until the bias environment begins lapsing. Then, nothing would prevent a trending attempt from extending in that direction.