Mid-day Update

Noon hour bounce hasn’t gained traction.

The open’s decline extended through the morning’s bias environment. Lapsing at 11:30 was greeted by 2 detached bars probing under  the 2626.00 objective down to 2614.00, accompanied by oversold RSIs.

A good opportunity to form a bottom. But it produced a bounce.

Not just a bounce, but almost a complete retracement to within 5 ticks of the 2669.50 open’s high. So, only noise — 54 points of noise — without having hesitated at the low to reflect any accumulation.

Now the afternoon’s bias-up parameters have been tested, and rejected after invoking the grace period. This is a no-bias environment, reflecting a lot of buying pressure having been expended without gaining traction for the noon hour’s effort.

Rejecting tests of both bias-up parameters in the morning would put into play offsetting tests of both bias-down parameters. Not in the afternoon. The 2633.50 bias-down signal doesn’t require a test, but its test would likely define the window’s low. Breaking any lower — or higher — would be more credible after the bias window begins lapsing at 2:30.

Pivotal correction forming. Has Globex-flip lapsed?

The open tested the 2798.00 earlier Globex low, indicating the morning would trend down. It didn’t hold. The 61.8% retracement between the opening print and Friday’s cash session close was touched at the 2773.50 low. It held.

Bouncing into the afternoon bias environment came within 1 point of its 2791.25 bias-up target. Being a bias-up environment, its 2784.50 bias-up signal should define the window’s lower-end — at least requiring its retracement if probed below. It’s being probed below.

We prefer that an objective be met to within at least 3 ticks, or else it becomes “unfinished business.” So, 2791.25 will become unfinished business above if not met. While coming within only 4 ticks isn’t optimal, it’s not a deal killer if momentum wants to reverse down. And currently a reaction down is testing 2780.00.

Only the noon hour has rallied, not the afternoon bias environment. We’re not yet assured that the bearish Globex-flip won’t be influential tomorrow morning, too, targeting 2763.00.

Two-three dips have resolved up.

The overnight dip to 2729.00 held the morning’s bias-down target and reacted up to 2741.00 before the open. The post-open dip to 2733.00 avoided triggering bias-down and was reversed up to 2748.50. Its reaction back down to 2736.00 bounced to test 2745.00.

Sellers tried, tried, and tried again. And got nothing for their efforts.

Now the noon hour’s attack on 2737.00 is also reacting up, so far to within 2 ticks of the morning’s 2748.50 high. This isn’t a trending session, but it is a Friday afternoon, when new sponsorship isn’t likely to overcome what current sponsorship has established. And current sponsorship has established that sellers keep trapping themselves.

Not having trended yet today, trending is still possible. This afternoon’s no-bias environment will inhibit trending above its 2745.75 bias-up signal (now being tested) — that would require being retraced, or extending higher could simply be slow-played or delayed until the bias environment begins lapsing. Meanwhile, there’s room to 2739.00 before suggesting that sellers aren’t actually marginalized for the day.

Holding recovery to fresh post-open highs.

This morning’s dip to at least test the 2727.75 bias-down target ultimately probed it 4-1/2 points lower. Nevertheless, its test was isolated — the 10:15 2736.00 print and the 10:30 2739.25 print were recovered as the bias environment lapsed from 11:30-noon.

Its buyers were rewarded by probing fresh session highs up to 2742.00. And now the market awaits the 2:00 FOMC Minutes.

The minimum likely reward is to probe above yesterday’s 2745.00 high. Hesitation can be considered as pessimism, which is potentially bullish from a contrarian perspective, and could contribute to probing well above yesterday’s high. Having said that, an initially negative knee-jerk reaction down has room to retest 2727.75 before suggesting a deeper pullback may be underway.

Explosion higher confirms oversold, but doesn’t ensure extension.

Coiling through yesterday’s close had required the rally to almost literally explode higher at today’s open. Gapping up does not fulfill the characterization. So, the post-open touch of 2698.00 was reversed to attack 2684.00.

Bouncing 10-11 points into the bias environment lapsing suddenly exploded higher. A surge to 2719.00 has eked higher through the noon hour to attack 2728.00.

The catalyst was lifting the embargo on the Fed Chair’s noon prepared remarks. It was no longer the open, so the explosion doesn’t qualify for confirming the rally remains intact.

We can still give the rally a benefit of the doubt — the open had formed a position of strength that was likely to absorb the morning’s backing-and-filling, and the explosion seems to have lodged itself above the resistance of last Tuesday’s “higher prior lows.”

Meanwhile, a pullback would be attracted down to this afternoon’s 2696.00/2702.25 bias-up parameters, if not also to this morning’s 2688.00 bias-up signal that was probed during a no-bias environment.