Mid-day Update

Bias-down avoided ahead of FOMC events, but not selling.

This open’s recovery to the 2144.00 overnight high did not extend higher. The 2139.25 open gave way just minutes before coming within view of the bias environment lapsing. No until the noon hour had been entered did its break accelerate, sliding to 2131.50 at the noon hour’s low.

Exiting the noon hour bounced to 2137.50. Another reaction down held comfortably above the 2133.00 bias-down signal to avoid triggering it. This is a no-bias environment.

While opening strength didn’t trend higher, it did hold up high enough and for long enough to create an anchor. The anchor creates context for assuming any subsequent selling pressure is weak-handed, temporary. That selling pressure had room down to 2133.00, which the noon hour held as support. Now a lot of selling pressure has been expended without gaining traction for the effort, and never probing negative territory.

The most bullish scenario would greet FOMC from above 2140.50, but that seems unlikely now. Even that wouldn’t necessarily prevent an initially negative knee-jerk reaction down, but the reaction would likely recover. Regardless, not quickly recovering a reaction down would leave upside attractions behind.

Attacking overnight lows has so far held as support.

The noon hour extended down and eventually touched 2131.00 in approaching the bias environment. The 2133.75 bias-down signal didn’t trigger — it was touched within 3 minutes of 1:20 to invoke the grace period through 1:30,k which was still touching it. So, there is no constraint to this afternoon’s range.

None of which removes the unfinished business below at 2128.25, which was put into play as this morning’s bias objective. But it can be left outstanding. And recovering 2136.50 (being tested now) could resume the overnight rally that had tried extending post-open.

Back under 2133.00 would resume the decline, and the 2128.25 attraction below. The afternoon is otherwise vulnerable to gravitating back up to the 2142.00 area, where resistance is largely chipped away, and vulnerable to being probed.

Noon hour reverses gap up and extension.

The morning’s rally was well-signaled. Pre-open pessimism down to 2138.25 was countered by restrained optimism testing 2141.50, then a post-open surge sliced through prior highs up to 2146.75.

RSIs got overbought, and price reacted down. Although it had room down to 2141.25 without yet reversing momentum down, it could have been shallower. It wasn’t, and 2141.25 was soon tested as support. Bouncing to 2143.75 almost resumed the morning’s rally. But the noon hour’s entry soon plunged to test 2135.00. And that has extended down to 2132.75.

Once again, 2134.00 has tried recovering. And once again, a recovery above 2134.00 is at risk of failing.

Back above the 2136.00 bias-down signal would not require extending any higher, but it would establish a lower-end for the next hour that is still likely to bounce, perhaps to retest the high’s overbought RSIs. The grace period was just invoked, and could still trigger bias-down.

Retesting this morning’s low.

The gap down at 2131.00 and slide to 2123.25 was retraced entirely during the morning’s bias environment. The 2132.75 bias-down signal was attacked to within 1 tick where its resistance produced a reaction back down to 2125.50.

The noon hour bounced again, to within 3 ticks of 2132.75. Resistance pushed back again. This afternoon’s 2124.25 bias-down signal didn’t trigger, but it is being tested anyway down to 2123.00.

Being a no-bias environment, its 2124.25 bias-down signal should define the range’s lower-end. And, so far, it is. No bar probing a fresh low under 2124.25 isn’t also overlapping 2124.25. And its test has reacted up to 2127.25.

The bias environment will come within view of lapsing at 2:15-2:20. Breaking under 2124.25 would then be entirely credible for resuming the drop. The leg underway Wednesday afternoon would be confirmed under 2121.25, still targeting 2095.00. The alternative to breaking lower today isn’t necessarily to rally, but at least firming back toward today’s high.

Morning rally not yet backing-off.

Absorbing the pre-open dip and its shallower post-open dip had marginalized sellers for the morning. Buyers exploited the conditions by triggering the 2124.25 bias-up signal. Its 2131.00 bias-up target was met, as was the 2135.50 next higher objective. The morning’s bias environment began lapsing at 2138.00.

Simultaneously overbought 1-minute and 3-minute RSIs at the morning’s high required a retest. That was just fulfilled, as the noon hour’s retracement to 2130.25 recovered the 2132.25 bias-down signal in time to trigger late no-bias. Room up to the 2139.75 bias-up signal was just fulfilled, too, taking RSIs overbought again.

Regardless of how strong the trending in one direction, we’re not considering it to be durable. Price action has been suggesting that this expiration can counter any trending. That would allow fulfilling the 2095.00 objective which yesterday afternoon’s market has already put on its to-do list.