Mid-day Update

Still stuck at the lows.

Dropping during the opening 15 minutes had probed well under 2158.00-2159.00. That area’s quicksand is irrelevant if its probe is isolated to a relevant timing window. And it was — reacting up sharply from 2154.00 to attack 2163.00.

But it was tested again, entering the bias environment back under 2158.00. And there has been nothing quick about it. Attacking this morning’s 2153.25 bias-down signal to within 1 tick did produce a bounce back up to 2158.00-2159.00. But that reacted down.

Now that reaction down is has recovered to probe above 2158.00-2159.00, which starts to suggest the quicksand is being left behind. It’s too late to trigger bias-up, so exiting the bias environment in rally mode is the next bullish scenario.

Holding support.

This afternoon’s 2156.00 bias-down signal was still being tested at both 1:20 and 1:30 to trigger noN-bias. Not a bias-down or no-bias. Greeting the 2:00 FOMC statement from above 2159.00 would start to be a position of strength. But nothing prevents a knee-jerk reaction in either direction, or for ultimately ending down.

But there is no unfinished business today above or below. The environment tends to be volatile, so be cautious with positions in this environment.

Morning’s plunge has no direct cause.

This morning;s 2166.00 bias-up signal did not trigger. Not for lack of trying, having been probed by 2 points. But holding its test put into play an offsetting test of the 2155.75 bias-down signal.

Invalidating the no bias at 10:30 wouldn’t have surprised me, with upside attractions being so near. But the market knows better. A sell signal triggered under 2164.25, the bottom dropped out, and a 30-minute 10-point plunge was suddenly probing 2 points under yesterday’s low down to 2153.75.

The noon hour retraced the entire plunge back up to 2164.00. But only retraced it. It wasn’t reversed or rejected. So, no-bias has triggered, despite probing 2 points above the 2161.75 bias-up signal. Again.

This afternoon’s 2153.25 bias-down signal doesn’t require being tested. But it probably will be tested, while retesting this morning’s 2153.75 low. That’s required because it was accompanied by simultaneously oversold 1-mijnute and 3-minute RSIs.

This morning’s brief test of 2156.00-2158.00 could have been dismissed. It happened during a no-bias environment and it was recovered by noon. This afternoon’s test of 2156.00-2158.00 could also be dismissed for similar reasons. But the burden of proof is on there being a forcible recovery coming out of the bias environment.

One problem for a recovery is the lack of a scapegoat for this morning’s plunge. There are plenty of candidates, but no specific catalyst. Even the worst news item can be discounted — however deeply, and forever how long it might take — and then the market can get back to business.

That’s difficult when lacking a scapegoat. So, be careful with longs until a prior high is recovered.

Lower lows still ranging around morning’s target.

Despite already having met this morning’s 2158.00 bias-down target. oversold RSIs that developed there had required its retest. Its retest had room down to 2156.00. Its retest touched 2156.00 before the morning’s bias environment lapsed.

Narrow noon hour ranging touched this afternoon’s 2155.75 bias-down signal. It held, and reacted up to 2159,25. But the noon hour lapsed back within its 2156.00-2158.00 range.

The 2155.75 bias-down signal didn’t trigger. This is a no-bias environment, with room for bouncing up to its 2161.50 bias-up signal. An afternoon recovery back to overnight highs isn’t assured, but would be difficult to start from any lower any later.

Probing back into yesterday morning’s range.

The choppy open’s ranging under 2060.25 and its “dry cleaners morning” setup didn’t change how much room was allowed simply to fluctuate. The 2164.50 overnight high could be probed by 1 point before even touching the morning’s bias-up signal.

In fact, the no-bias environment attacked the overnight high to within 2-3 ticks. The noon hour extended up to 2167.25.

That’s within 1 tick of this afternoon’s bias-up signal. And a narrow range hasn’t been able to break higher for the past hour. Now it’s too late to trigger. Probing above it would be “no-bias trending,” likely to react back down into the bias range to 2165.00. Any lower would target 2165.50.

Breaking above 2168.00 could extend to probe Wednesday’s high up to 2171.25. Or higher, while still being vulnerable to reversing back down sharply before the close.