Mid-day Update

opening rally extends. And extends.

Still overlapping the 2065.00-2066.00 renewed bias-up target at 10:15 prevented triggering a doubly-renewed bias-up signal. But it’s still a bias-up environment. And it was extended up to 2078.00.

The morning’s bias tends to persist through the noon hour on Fridays. But a relatively shallow pullback can still develop. Its objective would be 2067.50, which could become deeper, but probably not reverse the trend back down down.

Even if a pullback is only shallow, resuming the rally today is not assured. Marginalizing sellers doesn’t necessarily create a vacuum that sucks in buyers. And RSIs aren’t overbought at the current high, so it doesn’t require a retest.

But if the rally were to resume today, then its objective would be to test 2082.00. Otherwise, just a normal deeper pullback would likely hold the 2058.00-2059.00 area.

A new downleg may be forming after all.

This morning’s extended bias-down target at 2065.25 was met, and held. Its reaction up tested the 2076.50 bias-down signal as resistance. Choppy action ensued as Fed Chair Yellen testified to Congress.

Then the testimony ended.

Trending could hardly wait to resume. And it resumed the earlier trend. Fresh lows were tested down to 2057.00, which is now being retested during a wider consolidation. The consolidation is ranging around this afternoon’s 2060.00 bias-down target.

This is below the overnight reaction to Turkey’s shoot down of the Russian fighter jet.

Had this morning’s renewed bias-down been renewed again under 2065.25, then its objective was 14 points lower at 2051.00. A noon hour fresh low could be shallower and still recover. But the noon hour is lapsing, without rejecting its fresh lows. The next lower objective is 2051.00.

The 2060.00 bias-down target can be recovered by 1:20 to avoid renewing the bias-down signal. But it would still be a bias-down environment, and vulnerable to testing 2051.00. Exiting the bias environment back above the 2066.00 area would be the next opportunity for a credible rally.

Pullback target met.

The morning bias environment’s range was resisted by its 2103.00 bias-up signal. Holding its test through 10:15 had put into play an offsetting test of the 2095.50 bias-down signal. The actual break lower was slow arrive, but very quick to fulfill its objective.

The likelihood for probing even lower was fulfilled during the noon hour’s test of 2091.50. Except for 2090.00, the pullback we discussed before yesterday’s close wasn’t likely to probe much deeper.

That doesn’t equate to being a buy signal. Lower lows could yet be probed in the context of a temporary pullback — even 2088.00, so long as the close had recovered.

Bouncing is possible, too. In fact, the reaction to Yellen’s noon hour speech remarks just reacted up 5 points. But resuming the rally today is not required. The corrective influence may persist into the final hour, and any earlier bounce would be suspicious.

But now, the rally is defending a gain.

[SEE A SPECIAL MESSAGE AT THE END] The steep, deep reversal of the open’s surge was proved to be an anomaly. Plunging 13 points in 30 minutes from 2097.25 to 2084.25 never even attacked negative territory. And the bias-up signal still triggered, albeit late.

The noon hour’s flat-to-higher ranging held a test of the afternoon’s 2093.50 bias-up signal. This being a no-bias environment, the range’s lower-end should be defined by its 2086.00 bias-down signal if tested. A dip just attacked 2088.00. All of which is well into in positive territory.

The rally can resume when the no-bias environment begins lapsing. It’s not required. But, just attempting to rally when 2:30 comes into view — probing 2093.50 or higher — would be increasingly likely to extend to fresh highs through the close.

Otherwise, testing 2086.00-2088.00 into the bias environment exit would still be unlikely to trend down. But its rally effort would likely be limited to retesting the 2093.50 bias-up signal.

SPECIAL NOTE: TODAY’S POST-MARKET WRAP WILL BEGIN AT 3:30, AND I WILL BE UNAVAILABLE DURING THE SESSION’S FINAL 15 MINUTES.

Not yet too late to be scraping the lows.

There was no middle ground. Exiting the bias environment under 2088.00 meant exiting the bias environment at new lows. So, new lows were probed down to 2080.25 just before noon. The noon hour ranged narrowly.

The next lower objective has been met structurally, by retesting the 2082.25 overnight low. The next lower price objective is 2079.00. It’s in-play, unless the bias environment were exited above 2086.00 and 2088.00.

And now 2086.00 is being pierced. But not yet up to 2088.00.

Back under 2084.50 and 2082.75 would be likely also to test 2079.00. Its test isn’t required, and can be avoided altogether. But delaying its test until too late probably wouldn’t avoid a deeper pullback.