Mid-day Update

Impending illiqiudity can be a call to action.

Gapping down to touch 2176.75 was retraced to its 2183.00 target. The gaps back to yesterday’s closes were filled, and price immediately began reversing back down. Most of the bounce was returned already when the noon hour ended.

Then a strong rig count sent price to fresh lows at 2175.50. This afternoon’s 2176.00 bias-down signal magically reached out and stopped the slide short of 5 points. Its bounce has been shallow, but enough not to trigger bias-down.

The bias environment lapsing will see existing sponsorship lose interest, and offer a window for new sponsorship to take control. Two days of impending illiquidity can force moments of clarity. Nothing requires the pattern to change from defending against a decline to promoting it, but breaking under 2176.00 would suggest that’s happening anyway — and in a very big way.

Fresh highs consolidating narrowly.

This morning’s late bias-up signal triggered at 2176.75 and extended higher relentlessly until within 2 ticks of its 2182.25 bias-up target. Consolidating until the bias environment began lapsing was resolved up to another fresh high at 2184.25.

That’s still under the 2185.50 “unfinished business above.” Two hours of a narrow 2-point range since then hasn’t extended the rally. But neither has it been rejected.

I probably won’t have any sell signal ready to exploit potential downside. At this time, it looks like that would be only temporary, before recovering to a fresh high.

Early anticipation finds late sellers.

The ongoing pattern remains active, if not overactive. Abruptly rejecting the latest rally effort didn’t wait for post-open strength. The 2179.00 open’s gap up was reversed immediately, back down to yesterday’s 2177.50 close, and through it to 2170.00.

This morning’s 2171.75 bias-down signal needed to define the range’s lower-end. Essentially, it did. The pre-open restrained optimism and post-open immediate pessimism didn’t gain traction. They’re still potentially bullish from a contrarian perspective.

None of which requires an immediate recovery, or prevents extending lower. Not resolving Monday’s 2171.00 lower objective would have made its break likely Tuesday to compensate for the delay. Not resolving it Tuesday makes its test likelier to hold since Tuesday created a better anchor above. An afternoon rally remains possible, if not likely, so long as this morning’s lows hold.

Another narrow range.

This morning’s post-open drop to 2175.00 reacted up to 2178.25 during the bias environment. And that has reacted back down to 2175.00.

Not still trending away from the open helps to confirm it being an anchor. Having maintained the gap up above prior highs through the opening 15 minutes, any counter-trend action is likely only temporary.

Meanwhile, still not recovering also helps to confirm there is “unfinished business below.” The offsetting test of this morning’s 2171.00 bias-down signal remains outstanding.

Unfortunately, being stuck all this time between a rock and a hard place doesn’t make the first break’s direction any likelier. Or its ultimate reversal. The afternoon bias environment will soon come within view of lapsing, and might finally resolve the standoff.

Shallow range at the highs.

Sunday’s 2177.75 Globex trend extreme was touched during the noon hour, along with this afternoon’s 2178.00 bias-up signal. Both held.

The trend extreme is likely to be tested more substantially than by piercing it only by 1 tick. Probing above it, and above the bias-up signal during a no-bias environment, would be vulnerable to reversing back down.

Vulnerable to reversing back down, but that reversal must be obvious as the afternoon bias environment begins lapsing at 2:30. NEVER underestimate the prevailing trend’s persistence of Friday trending, especially when counter-trending isn’t already taking control during the afternoon.

But exiting the bias environment back under the 2174..25 area could melt down into the close. Trending is difficult to reverse on Friday afternoons. Counter-trending is difficult to stop then, too.