Mid-day Update

Fresh lows not gaining traction.

This morning’s bias-up signal became invalidated, and fell to its 2650.50 bias-down signal. That seems like sellers are patient. They did produce fresh lows into the noon hour that met this afternoon’s 2642.00 bias-down target to within 3 ticks.

But now this afternoon’s bias-down signal has avoided triggering. And the noN-bias environment doesn’t prevent rallying above the bias-down signal.

noN-bias doesn’t require the 2651.25 bias-up signal to define the window’s upper-end. In fact, it was probed by 8 points. The likely upside objective is still 2662.50, but it doesn’t require being met. And the decline may resume.

Exiting the bias environment (or entering the final hour) above 2662.50 would suggest that sellers from yesterday’s high are done. Meanwhile, breaking under 2642.00 would simply point down.

PROGRAMMING NOTE: I’M AWAY FROM THE SCREENS BETWEEN 1:30-3:00, AND BACK FOR THE FINAL HOUR…

The minimum likely upside objective is also this afternoon’s 2687.00 bias-up target. And it is being met as the bias timing window is entered. This is still a bias-up environment, but 2687.00 does represent resistance that can force even the most bullish rally to correct.

We’ll see.

This morning’s rally has been a choppy uptrend already, with plenty of overlapping pullbacks forming an ongoing series of higher highs and higher lows. A single corrective dip has room down to 2672.75-2674.00 while still being likely to resolve up.

Resolving up from such a singular dip could be very aggressive, triggering a short-squeeze as a round of hold-outs capitulate to get long. Otherwise, extending a pullback under 2671.00 could fill the open’s gap to either of its proxies, 2658.25 or 2650.50.

REMINDER: I’M AWAY FOR TODAY’S LAST HALF-HOUR, SO MARKET WRAP WILL BE HELD EARLY…

Potential to backing-and-filling this morning became more vulnerable as the overnight rally extended. It got to 2678.00 and ignored opportunities resume, instead retracing down to 2632.75. That’s well back under yesterday’s 2648.50 late high, its afternoon high, and touching its noon hour high. This stage of the rally effort depended largely upon maintaining  excessive optimism, and avoiding yesterday’s session was optimal.

A quick dip into yesterday’s range would have kept optimism alive, but the dip has not been quick. And now the dip is threatening to extend.

This afternoon’s bias-down signal triggered, already fulfilling its target. Exiting the afternoon bias environment in an hour and recovering its 2646.25 bias-down signal would get another opportunity to resume yesterday’s recovery attempt. Trending down through the bias environment exit would remain vulnerable to resuming the decline.

Clinging again to Friday’s lows.

This morning’s 2583.00 low qualifies as a retest of Oct’s 2603.00 low. Oversold RSIs at this morning’s low will want to be retested, as they did at the prior low. That took two months, and might take awhile this time, too — if the afternoon bias environment can extend the noon hour bounce.

Otherwise, this morning’s lows can be broken this afternoon, and probed through tomorrow morning.

This morning’s last downleg had aggressively entered and exited a Falling Wedge. And now the wedge has been retraced, attacking the origin of this morning’s last downleg. The bounce can extend higher through the bias environment, and potentially form a bigger bottom. Otherwise, not extending higher through the bias environment would make the noon hour bounce only a temporary correction.

If sellers aren’t finished, then they’re just getting started.

This morning’s reversal of its post-o0pen relief rally has extended down to 2642.50. That tests the afternoon bias-down target by 2 ticks. The 2650.50 bias-down signal held through its grace period to trigger late no-bias.

But it’s still being tested. And this is a Friday. A late bias signal is already less reliable. Extending to fresh lows would likely target 2626.00. Which already held a test yesterday, so there’s no bullish reason to be revisiting it.

Extending lower probably requires participants to become impatient with not bouncing again into the close. Back above 2662.00 would start to signal that bounce underway. Until then — whether during or after this afternoon’s no-bias environment lapses — the pattern remains vulnerable to extending down.