Mid-day Update

Morning’s rally fulfilled rally’s traction, but none replaces it.

Yesterday afternoon’s rally gained traction by trending higher through its two relevant timing windows. Despite already extending higher into the close and overnight to 2059.25, this morning’s trended higher, too. That required a deep dip into and out of the open down to 2045.50, but it recovered to 2063.50.

The noon hour only trended down. The 2056.00 bias-down signal triggered, and its 2050.50 bias-down target has been met. Now a bounce is testing the 2056.00 bias-down signal as resistance.

This being a bias-down environment, its 2056.00 bias-down signal should define the range’s upper-end. Probing above it would have to be retraced. Hovering around it until the bias environment begins lapsing could then extend higher.

Tomorrow afternoon’s FOMC Minutes release might inhibit trending much before then. This leg of the rally still has potential to 2068.00. Meanwhile, back under 2053.25 would signal a fresh low in-play, potentially targeting 2046.25, but not necessarily any lower.

Still overlapping overnight highs.

Holding the 2027.00 bias-up signal’s test didn’t require an offsetting test of the 2017.00 bias-down signal since that was touched during the open. There was room for noise down to 2017.00 nevertheless, but it was barely attacked to within 2 points.

Now the bias environment has lapsed, and 2027.00 is being retested as resistance. Recovering it through the bias environment lapsing would have resumed the overnight recovery. Absent that, its proxy would enter the noon hour above the morning’s 2030.00 highs.

Neither condition was met, although sellers haven’t retaken control.

Being the noon hour, fresh highs can be probed above 2030.00 without requiring further reward. And probing under 2023.00 can target fresh post open lows down to 2012.00 or lower. Anything in between is not predictive, except that delaying another upleg could easily default to at least a momentary fresh session low.

Bouncing, still within the context of a correction.

Bouncing this morning from 2023.00 up to 2029.00 resolved down to 2021.25. But only briefly, as the dip was recover faster than it had developed. Attacking 2029.00 was consolidated. And then it broke higher.

The break higher targeted 2035.25. A 9-point surge is testing it up to 2036.75. While still well in negative territory.

Back under 2032.00 would signal the bounce had ended, probably reversing down to probe fresh session lows. But extending much higher first, through 2038.00, would start to suggest a bigger rally is underway.

Fresh session lows attacking new support.

The first hour had ranged choppily between 2054.00-2060.00 before launching a surge. It was too late to be sponsored by weak hands. Too late, and too early.

Just at the prospect of surging I had warned already it would be only temporary. Peaking 1 point short of its potential at 2063.50, the surge was retraced back into the 2054.00-2060.00 range.

The consequence of the inappropriately-timed surge was new session low. And now a noon hour drop is testing 2049.00. That’s almost within 1 point of this afternoon’s 2047.75 bias-down target. And the target won’t be put into play if its 2054.00 bias-down signal is recovered at 1:20 (a bounce is probing it now by 1 point).

Meanwhile, another setup may be forming — the Lunch Hour reversal. It is triggered by isolating a fresh session extreme to this timing window. So, recovering noon’s 2056.00 print coming out of the noon hour would presumably reject the interim probe under the morning’s lows.

The Lunch Hour reversal may be today’s last opportunity to launch a rally. Even then, recovering 2056.00 would be allowed up to one retest of the noon hour’s low. Anything lower would point down a lot.

Noon hour’s bounce reverses. Again.

The morning’s drop fulfilled its 2071.25 objective — testing the bias-down signal to offset that the 2080.50 bias-up signal had held its test as resistance.

An inverted Head & Shoulders formed there. The pattern proved very powerful, launching a rally to 2082.50. But, wait, there’s more…

The afternoon’s 2079.25 bias-up signal held its test  to trigger no-bias, putting into play an offsetting test of the 2073.00 bias-down signal. And that has been touched.

This is still Veteran’s Day, but the market won’t care after the no-bias environment starts lapsing. That’s when price action starts discounting the next session. And this wide range — perhaps also including yesterday morning’s unresolved wide range — would be vulnerable to breaking either way.