Mid-day Update

Sponsorship to extend higher must make itself obvious soon.

Exceeding the 1960.00 objective has spent the morning trending higher. That doesn’t yet confirm a bigger rally is underway targeting a complete retracement of the August FOMC reaction’s 2011.75 high — but it’s a start.

Confirmation still could go a little further. Near-term, that would be to trigger this afternoon’s bias-up and extend higher so a late-afternoon drop has room to be absorbed reaction down. Or at the close, maintain the recovery above 1960.00.

Sponsorship for extending higher is needed. Because the morning’s rally has satisfied all other objectives that developed along the way: The structural requirement to probe above the open’s 1968.25 highs, the pattern’s likelihood to reject the shallow false break lower. Swing measurements targeting 1969.50.

Exceeding 1970.50 now should also trigger the 1968.75 bias-up signal at 1:20. Probably not back under 1966.50, and even less so under 1960.00.

Session-long decline inverts and then some.

This morning’s bias environment began lapsing above the “session-long decline” signal, and held up into noon. This is without the morning’s bias environment having probed a fresh low. Consequently, the session-long decline inverted.

Each remaining timing window with one exception should probe above its prior timing window’s high.

The noon hour’s 1905.00 entry took that to heart and rallied 15 points. Its exit extended 6 points higher to 1926.50. That raises the bar on subsequent timing windows. In fact, the current afternoon bias environment has dipped to 1917.00.

Only one timing window remains, so it should probe above the bias environment’s 1924.50 high (notice that’s not a new session high, just above its prior timing window’s high). Nothing in particular must happen after that.

The bias environment hasn’t yet lapsed, and may yet probe a fresh high. If so, then the last timing window would have no requirement — and it would be free to decline.

Wide swings ahead of Yellen.

Buyers have been productive, but they haven’t gained traction. First, this morning’s probes of higher and higher highs each overlapped the 1904.75 objective that was next in-line above 1997.00-1999.00.

At least its eventual reaction down avoided probing under the morning’s 1892.00 bias-up target until after the bias environment had lapsed. It was still probed, considerably, to within 2-3 ticks of this afternoon’s 1886.00 bias-down target. But the next bias timing window was exited back above the bias-down signal — coincidentally, also 1892.00.

Now another bounce is exploiting that late unsustained selling, now testing 1902.00. But this is the second instance of productive buying, which isn’t gaining traction. Being a no-bias environment, its range should be defined by its bias signals. And since 1899.75 is this afternoon’s bias-up signal, probing above it should be retraced.

Actually, the afternoon’s 1899.75 bias-up signal is being retraced now. Often, the consequence of probing it prematurely also includes retracing the 1:20 print — that’s 1895.50.

Back under 1898.25 would target 1895.50. It would also create potential for retesting the noon hour’s lows, and lower. Retracing all of the rally from yesterday’s low isn’t required today, but it is required.

Reacting to the noon hour piercing negative territory.

This morning’s recovery from fresh lows hasn’t dragged bulls out from their hiding places.

The bounce back up to 1889.00 resistance reacted back down to 1868.50. That’s 3 points under yesterday’s cash session close. It was also under the 1872.25 bias-down signal, which recovered in time to trigger “late no-bias.”

“No-bias” allows room up to this afternoon’s 1886.00 bias-up signal. It’s not required to use all that room, and it wasn’t — natural resistance at a 61.8% of the downleg held at 1881.50.

Now the bias environment is lapsing, and the choppiness should end. Retesting the 1872.25 bias-down signal as support has reacted up to 1879.00. It reacted up aggressively which is appropriate if momentum is reversing up.

Noon hour low is already testing the target.

The next lower objective under 1899.00 is 1884.00. Not exiting this morning’s bias environment back above a relevant level would leave 1884.00 outstanding to become “unfinished business below.”

So much simpler just to fulfill its test. Which was done soon after noon. And now it’s being probed down to 1881.50.

1884.00 is essentially this afternoon’s bias-down signal. The bullish scenario would avoid triggering the signal at 1:20, instead of trying to bounce back from its target.