Mid-day Update

Nearing the next higher target.

This morning yet again dipped aggressively. And yet again, the dip was retraced entirely back up to a new relative high.

The first half-hour’s test of 2590.00 was retraced just in enough and just in time to avoid renewing bias-up by exceeding the 2586.50 bias-up target. Its eventual collapse tested this morning’s 2569.25 bias-down signal. Support there rejected the dip, which was retraced entirely to fresh highs at 2595.50.

This afternoon’s 2592.25 bias-up signal was still being overlapped at 1:20 and 1:30 to trigger noN-bias. The bias signal need not hold, and its target isn’t necessarily in-play. But the upside has slowed ahead of this afternoon’s FOMC Minutes.

Meanwhile, after several intraday dips and their recoveries during the past several sessions,
each resolving in higher highs, the market seems to be accepting that the near-term trend remains up. Pullbacks are getting shallower and their retracements are coming earlier.

Buyers no longer wait to get long for the next higher high. Not that another dip can’t develop, but its likelihood gets exponentially less with each dip’s recovery to a fresh high. None of which prevents a negative knee-jerk reaction down on FOMC Minutes due shortly.

Post-open dip recovers back above prior highs.

Today’s great conundrum has been the open’s clearly defined position of strength failing to defend its session-long rally setup from being invalidated. Gapping up and trending up through the open doesn’t require extending higher immediately, but its reactions down tend to be brief and fully recovered.

This morning’s reaction down was substantial — 34 points from above 2581.00 to under 2548.00 — and not recovered. Not, yet.

This afternoon’s bias-up triggered late, but its target is being probed. The 25-point bounce from this morning’s low is now testing 2572.50. That’s 5 points above yesterday’s 2567.50 high, whose recovery through the open has been the basis for any bullish scenario today.

At least maintaining the recovery from having probed temporarily back into 2548.00-2555.00 would be bullish, but only for not letting sellers gain more traction. The bear market rally would remain intact, next targeting 2606.00. Closing above yesterday’s high would be optimal, but a lot could be said for having absorbed the intraday dip.

Otherwise, another downleg upon exiting this afternoon’s bias environment could be attracted back down to oversold RSIs at this morning’s low. And as late as it would be, another downleg upon exiting this afternoon’s bias environment would be difficult to find sponsorship for a recovery.

Fresh highs into, during, and out of the noon hour.

This morning’s bullish setups were all influential to absorbing the open’s attempts to reverse down. And the bullish setups were all influential to probing or trending higher this morning. And the bullish setups were all satisfied by noon.

But the rally kept on.

Now this afternoon’s 2562.25 bias-up signal has triggered. Its 2569.25 bias-up target has been attacked to within 2 points. It should be attacked to within 3 ticks at 2568.50 — perhaps up to 2570.00 — before a sell signal can be reliable.

Closing above the 2548.00-2555.00 range would next target 2606.00. Closing under the range would signal that upside momentum had lapsed. If the latter, then I would expect the close to be under Friday’s 2539.00 high to avoid confirming its breakout.

Session-long rally already recovers its likely objectives.

Having trended down into yesterday’s close, exiting the open above yesterday afternoon’s bias-up signal formed a “session-long rally” setup. So, every timing window should probe the prior timing window’s high. Usually there’s one exception, and usually it’s the noon hour.

The noon hour probed fresh highs, so the exception will be either the afternoon bias environment or the final hour.

The bias environment is currently dipping, but it’s no too far removed from the high to probe it. Not probing a fresh high by 2:30 would be likely to probe fresh highs before the close. Probing fresh highs before 2:30 would be free to reverse down through the close.

Meanwhile, the room for noise above the past week’s highs up to 2525.25 has been exceeded up to 2539.25. Closing above 2525.25 would put into play 2548.00-2555.00. Closing under 2490.00 would reverse today’s rally.

Afternoon bias avoids triggering.

This morning’s 2450.50 objective was only overlapped while being probed down to 2447.25 as RSIs improved. A reaction up was likely, and its likely 2470.00 target was exceeded substantially up to 2489.00. All of which was retraced to the room for noise around 61.8% down to 2454.50.

Now this afternoon’s 2462.25 bias-down signal has triggered noN-bias, for overlapping it at both 1:20 and 1:30. It’s not required to define the window’s lower-end, and its target below doesn’t require being tested. Which isn’t unusual when it’s difficult to generate sponsorship ahead of tomorrow morning’s Employment Situation report.

Meanwhile, holding this morning’s test of Tuesday night’s 2452.00 low can be predictive, either way. Recovering to close back above Friday-Monday’s 2472.00 and 2482.00 relevant lows would signal that the second consecutive intraday recovery was accumulative. But only holding the low’s test without yet recovering would remain vulnerable to extending the decline.