Mid-day Update

Finally probing the range.

The sideways overnight 2632.00-2645.00 range didn’t break either way, not before the open or after it. Post-open trending has been contained within the range. It’s always difficult to start trending from a standing stop.

Which isn’t to say that the range’s ends aren’t being tested. Support at 2632.00 was tested twice during the open’s bias timing window, and touched during the noon hour. Each window isolated its test of 2632.00. Until the noon hour, whose probe under 2632.00 was extended down to 2626.00.

That fulfills this afternoon’s 2627.25 bias-down target. It held through 1:20 to avoid renewing the bias-down signal. There’s room for noise below to also test 2625.00. Again. And potential for retesting 2625.00 to also visit 2605.00.

Meanwhile, unfinished business at this morning’s 2650.00 bias-up target would be the likely reward for any recovery. Room for noise above it to 2656.00 or 2666.00 would maintain the trading range, and also not yet signal it is resolving up instead of down.

Noon hour bounce gains no traction.

This morning’s drop extended to 2632.50 while still being required to retrace the 2638.50 bias-up signal. Its retracement was close enough to the bias environment lapsing that its attraction was neutralized. The drop resumed down to the noon hour’s 2612.50 low.

2605.00 is still the likely objective.

Bouncing through the noon hour has extended to attack this afternoon’s 2631.25 bias-up signal. A couple of supportive levels could slow a reversal down, but back under 2622.75 would start to signal the decline has resumed.

Otherwise, probing any higher would require being retraced, but not after the bias environment starts lapsing. Even the most bearish drop isn’t required to resume today, but closing in negative territory if not also under yesterday’s 2616.50 low would be likely unless a bigger bounce were about to begin.

Has the drop gotten ahead of itself?

Even the first break from this morning’s opening 15 minutes of volatility was still within Friday’s range. But its 2647.00 lower-end soon broke, and has extended down. This afternoon’s bias environment is being greeted at 2623.25.

That’s a test of “lower prior highs” at 2625.00 from last Wednesday and Thursday. Having expended so much energy to test a relevant level, holding its test through a relevant level can define a near-term low. Already, a bounce is testing 2632.50. The bias-down environment could also test its 2638.50 bias-down signal without yet suggesting a bigger recovery underway.

Oversold RSIs at the low will require an eventual retest. Probing only slightly lower fresh lows would be tolerated by any pattern trying to form a durable low. There’s otherwise risk that the low’s retest will facilitate a new downleg next targeting 2605.00.

The most bullish scenario may be to avoid a decline.

The noon hour’s high attacked this afternoon’s 2677.25 bias-up target to within 3 ticks. This is still a bias-up environment, and its target is in-play. But it won’t become “unfinished business” if left outstanding when the bias environment begins lapsing.

Meanwhile, upside momentum is suspect. A 2672.25 pullback limit was violated upon entering the noon hour. The rally attempted to resume without first taking time for any accumulative behavior — no backing-and-filling or complexity of any sort. The rally’s attempt to resume hasn’t extended. In fact, the violated pullback limit’s 2668.00 low is being probed now.

This afternoon’s bullish WedEX influence doesn’t prevent there being a temporary corrective dip. Presumably, this current break now testing 2666.00 will be recovered. Back above 2671.75 would start to signal momentum reversing up. Regardless, WedEX doesn’t require resuming the rally, only retracing dips.

3 ticks under yesterday’s high.

Reversing down through yesterday’s last 60-90 minutes, and extending down through Europe’s opens, has now been retraced to within 3 ticks of yesterday’s 2626.50 high. Such is the power and persuasion of 2626.00, not only as a repellent as its test fulfills buying pressure, but also as an attraction from testing support.

That support is the ~2598.00 “lower prior highs” that was tested overnight. Its intraday test would have been optimal and reliable, but that hasn’t mattered to the rally underway from the open. The 2626.00 attraction is actually the reward for having absorbed the interim drop.

Extending higher would suggest that 2658.00 may be tested before the weekend. But nothing requires trending any higher today. Wednesday’s confirmed breakout does require an eventual higher close, but not necessarily today. And WedEX’s bullish influence should be evident tomorrow afternoon. Sideways ranging or an interim dip wouldn’t affect either setup.