Mid-day Update

Open’s surge turns bad.

This morning’s 2097.00 bias-up signal triggered. It wasn’t rejected at 10:15, when the surge to 2102.00 was consolidating. It was probed soon after, but still held above the 2088.00 bias-down signal that would have rejected it at 11:30.

The noon hour and its entry repeatedly tested 2089.75 as support. That has resolved down to fresh lows at 2085.00. The afternoon’s 2088.00 bias-down signal has triggered the grace period — it can be invalidated if recovered through 1:30.

Dipping this morning instead of rallying would have had room down to 2082.00 as just a temporary correction. That’s still the case, regardless of the open’s interim surge. Regardless, this morning’s 2103.25 bias-up target became “unfinished business above” that requires being tested eventually.

FOMC and resistance just ahead.

This morning’s fulfilled bias-down environment attempted what two prior timing windows had tried and failed — yet another fresh low was recovered back to a prior high.

This time worked. The recovery extended up to 2090.00.

The 2065.75 low had essentially fulfilled the renewed bias-down signal. It was never in-play, since the 2071.00 bias-down target was recovered through 10:15. Lower lows were possible, despite not renewing the bias-down. But not renewing had left the door open to recovering.

And the recovery extended through the noon hour.

Now a 5-point pullback is reserving optimism ahead of the 2:00 FOMC Minutes. A knee-jerk reaction and resolution are not required to be in either direction, so be careful with any position going into the news.

Unable to bounce off of morning lows.

Probing under this morning’s 2085.00 bias-down target wasn’t recovered in time to avoid renewing the bias-down signal. That essentially put into play the 2076.00 renewed bias-down target.

2076.00 was attacked, tested, retested and probed. It is still being tested as the afternoon bias environment is entered.

Avoiding lower lows is unlikely, despite this afternoon now being a no-bias environment. Whether it’s 2073.50 bias-down signal, or down to 2071.00, fresh lows would make a later recovery effort above 2080.00 more credible.

The risk in probing lower is in not recovering. The pattern’s structure requires recovering from a fresh low to form a durable bottom. But that’s also how a new downleg gets underway if not recovered.

Opening surge being retraced.

This morning’s surge from its 2089.00 open to attack 2100.00 has retraced steadily into the noon hour’s exit at 2092.00. This action helps to confirm that the opening strength was fueled by weaker handed buyers fearing another runaway session.

Dipping through the noon hour need not recover, let alone resume the rally. Not today. Which leaves potential for a late-afternoon slide. Exiting the bias environment at 2:30 still in positive territory could at least undermine fresh lows, but not necessarily inspire a rally.

Nothing about this morning’s rally makes an afternoon slide any less likely. It was never the likeliest scenario. Nevertheless, still not extending higher by 2:30 would be vulnerable.

25-point rally into the afternoon.

When the 2065.00 bias-up signal was recovered 1 minute too late to trigger, I was skeptical

Overstated? Not warranted? No. But clearly not necessary. Rejecting the late dip down to 2061.50 was extended into the bias environment exit, piercing its 2077.00 objective. Rallying throughout the noon hour has recovered to 2085.50.

Exceeding this afternoon’s 2083.00 bias-up target at 1:20 would renew the bias-up signal, next targeting at least 2087.50. It’s still a bias-up environment so long as 2077.00 isn’t rejected through 1:30 — which could find a deep air pocket back down to 2065.00.