Mid-day Update

Gap back to Friday’s cash session essentially filled.

The bearish WedEX’s influence ultimately sent the morning down. It wasn’t simply from the open, but it was done. Essentially. Friday’s cash session close was attacked to within 1 point at this morning’s 1995.75 low.

And it’s all just noise within Friday’s last downleg.

The overnight and open highs attacked and tested Friday afternoon’s 2014.25 high, so neither end of the last downleg has been probed. If Friday’s actual 1994.00 and 1991.00 lows aren’t actually probed, then the lows haven’t actually held a test.

So, the pattern is no more bullish now than it was at Friday’s close.

Actually probing Friday’s low and recovering it would be more bullish, as holiday seasonality starts undermining sponsorship. That’s still possible, but it hasn’t yet been done. Bouncing anyway is possible, too, but not reliable.

Another recovery effort failed, albeit only by a drift lower.

Click here to view a late-morning overview we did of Crude Oil and Precious Metals – Gold & Silver (we’ll do frankincense and myrrh next week). Crude Oil was testing its bounce limit, which doesn’t now seem like it will be recovered by the close.

This morning’s bounce could have rejected the bias-down by recovering 2018.00. The bounce touched 2018.00, and trended down from there to 2001.50.

WedEX has inverted to bearish. Its only requirement on Friday is that bounces fail. Monday is the aggressive follow-through if Friday’s minimum requirement is fulfilled.

This afternoon’s 2008.00 bias-down signal was being overlapped within 3 minutes of 1:20 to invoke the grace period. Its 2001.50 target was met already to within 1 point. It can be probed more thoroughly. Nothing prevents trending down under it, but that’s not required.

Today’s market Wrap is one hour early at 2:55 ET.

[I’m away from the screens for the last hour, following the Wrap.]

The inverted morning-long rally (I’m sure there’s a simpler name for that) extended down through the bias environment’s exit. From the 2072.75 overnight high to the 2069.25 open, down to the 2038.25 low, a lot of selling pressure was expended.

And S&Ps are still above yesterday’s prior low.

After two days of stiff upper-lip into the widely-telegraphed historic rate hike, which prompted a surge — all ahead of quadruple witch expiration — a pullback can be dismissed. Pulling back under any conditions without actually signaling the rally was inverting could not have been dismissed.

So, while this afternoon is a no-bias environment, this, too, shall lapse.

If price action continues hovering at or under the 2050.50 bias-up signal, then trending up out of the bias environment would be entirely credible for extending higher through  the close. Exiting the bias environment in decline would still have room down to Tuesday’s 2030.00 low before suggesting the trend may be reversing down.

Bounce potential more than fully satisfied.

Actually, the bounce underway could extend next to 2052.00. But that would really be pushing it. Just testing 2040.00 and its room for noise up to 2041.50 sent price down to 2030.50. Its noon hour recovery probed nearly 2 points above the afternoon’s 2044.00 bias-up target.

The bias-up target wasn’t rejected entirely — 1:20’s bias timing window only attacked the 2038.25 bias-up signal as support. And it was only being overlapped at 1:30. Pierced, yes, but overlapped.

That reaction down has extended to 2036.75, and it’s probably targeting 2034.25. Probing under the bias-up signal isn’t unusual, this being a bias-up environment whose target has been met. But the 2038.25 bias-up signal still should be revisited.

It’s no longer premature for trending to be inhibited by its proximity to tomorrow’s FOMC policy statement. The balance of the session could still range choppily, but likely only range or temporarily probe its fringes.

Lowest calculable objective met, held, already well rewarded.

Ultimately, this morning resolved down. Great effort was expended pre-open and post-open to avoid triggering sell signal or to recover from them. But the ongoing series of lower lows and lower highs triggered late bias-down.

The 1990.25 bias-down target was met, as was the lowest calculable objective of 1983.50. In fact, the latter held and reacted up sharply, currently testing 2001.25.

Yet, the series of lower lows and lower highs remains intact. Trend reversals must recover not just one but two prior extremes. And this one is still only touching its second at 2001.25.

It’s the noon hour, which inherently makes the bounce suspicious. And it is struggling at the natural resistance of retracing 61.8% back to the open’s highs.

Triggering the 2002.50 bias-up signal in an hour would launch an entirely credible recovery attempt. Resuming the decline could find sellers very well refueled.