Mid-day Update

Attraction above neutralized, just in time.

The offsetting test of this morning’s 2738.25 bias-up signal was met at this morning’s high. Its reaction down could have been shallow and/or brief, but it was deep — down to 2721.50 by noon.

Ultimately, a surge up to 2748.75 fulfilled the offsetting test of this morning’s 2745.50 bias-up target. The surge there was triggered by a Trump tweet on China trade, but it didn’t require extending so high.

Anyway, now this afternoon’s bias environment has begun, and a bearish WedEX influence is likely. The noon hour’s surge has been retraced already down to 2724.75, largely retracing the tweet’s origin, and all of the 2727.25 buy signal that it had triggered.

Friday afternoon’s Bearish WedEX can be shallow, too, and usually is. Regardless, price action should be biased downward through the close.

Buyers leveraging the trapped shorts.

This morning’s bias-down signal triggered despite having been recovered from testing its bias-down target. So, the bias-down target’s retest was put into play, producing fresh lows down to 2671.25. And producing the opportunity for a second consecutive close under prior lows that would put into play the next lower objective.

That disappeared in a hurry. The bias environment lapsed just above its 2691.25 bias-down signal, isolating the interim probe under prior lows. Either it was another temporary corrective bounce, or else sellers were done.

It does seem that they were done.

Extending higher into the noon hour peaked at 2710.00 before dipping back down to 2691.50 (1 tick short of the morning’s bias-down signal). The afternoon’s 2695.50 bias-down signal’s test was recovered in time not only to avoid triggering it, but also in time to test the 2711.00 bias-up signal. Which triggered.

Its 2718.00 bias-up target is being exceeded up to what would have been the 2729.00 renewed bias-up target at 2729.00. This is the sort of pattern — failed attempt to confirm the downtrend — that can be rewarded by a relentless intraday rally. The 2760.00 area isn’t necessarily in-play, but its test wouldn’t be surprising so long as another drop doesn’t break back under 2711.00.

Entering the afternoon at fresh lows.

Despite rallying up to 2748.25 through the open, both the 2742.25 and 2735.50 bias-up parameters were rejected. Tests of both the 2718.00 and 2711.00 bias-down parameters were put into play. Both were tested, and then some.

2705.00 had been attacked when the morning bias environment started lapsing. A choppy noon hour has resolved down, and the afternoon bias environment’s entry had already attacked its 2698.00 bias-down target. Nevertheless, its 2706.25 bias-down signal wasn’t cleanly triggered, so this is a noN-bias environment.

This is not a no-bias, requiring its bias-down signal to define the window’s lower-end. And this is not a bias-down, requiring its target to be met (although it’s being probed now down to 2692.75).

Exiting the bias environment back above 2698.00 would start to suggest that sellers are done for the day. Meanwhile, there is still an attraction below at 2685.00-2686.00.

Downside target met already, again.

Holding a test of the morning’s 2738.50 bias-up signal, despite having traded to 2744.00, all rejected as price collapsed back down to overnight lows. Then all recovered, and more.

This morning’s low reversed up sharply from within 2 ticks and 2 minutes of fulfilling its 2720.00 objective. The open’s 2744.00 high was retraced within a half-hour. Fresh highs attacking 2756.00 within the next 20 minutes.

Is a similar setup developing? This afternoon’s low touched its 2727.75 bias-down target. Bias-down did trigger cleanly, but a reversal is already being attempted up to 2740.50. Anything above the 2735.50 bias-down signal is “no-bias trending” that requires being retraced.

Extending higher could find sellers are done, and with no attractions outstanding below. Otherwise, back under 2731.50 would start to signal the bounce had failed, and once again open the door to another downleg.

Pause in decline might be a bottom. But only if…

The open’s collapse from 2777.00 to 2754.00 had not bounced until the bias environment was entered. It measured 8 points up to 2762.00. And then it collapsed. Fresh lows at 2733.50 produced a second bounce as the bias environment lapsed. It measured twice, gaining 16 points into the noon hour’s 2749.00 high.

The second bounce is now also failed, retracing its origin and probing fresh session lows by 1 point.

But it’s too late to trigger bias-down. Probing under this afternoon’s 2736.25 bias-down signal during the no-bias environment is called “no-bias trending” and will require eventually being retraced to the 2736.25 signal, regardless of the interim or ultimate resolution.

In fact, its dip is already retraced, and reversing to attack this afternoon’s 2746.50 bias-up signal.

“No-bias trending” rules would apply in either direction, requiring being retraced. But not necessarily reversed. Resuming the decline is still possible, as is reversing it — especially when the bias environment starts lapsing at 2:30.