Mid-day Update

67-point drop touching the low session’s high.

Invalidating this morning’s bias-up through 10:30 didn’t require offsetting tests of both bias-down parameters. But they were tested. Their tests didn’t require holding. And they didn’t.

Completely retracing yesterday morning’s lows was likely, and likeliest to visit 2701.00. The low was 2699.50. The target was met coming out of the noon hour, when persistent Friday morning bias signals tend to lapse. Combined with RSIs diverging positively, a reaction began. Reacting up overlapped this afternoon’s 2709.50 bias-down target in time to avoid renewing the bias-down.

Being a Friday afternoon, and the bias-down target has been met and held, not resuming the decline would allow ending the session higher. Exiting the bias environment in rally mode could firm into the close. Probably not as a short-squeeze, per se, but there’s not much difference with such wide ranges for noise alone. It’s helpful that the low actually overlaps the 2707.00 high of Monday’s session, which is relevant for also having printed the trend low — of course, its test has already reacted.

Meanwhile, this is still a bias-down environment, so sellers aren’t marginalized, and the decline may resume. The window should be defined above by any test of its 2717.25 bias-down signal (being tested now). Back under 2704.50 could trigger another downleg targeting 2694.00-2696.00. Any lower could capitulate.

Probing fresh session highs.

The close-quarters Double Top that had formed from testing 2729.25 ultimately reacted down 21 points to 2721.25 after entering the noon hour. Rallying straight up since then has extended to probe the morning’s highs up to 2732.00.

And now the current 2730.25 pullback limit is being violated.

Slightly exceeding the 2728.25 bias-up target at 1:20 was sufficient to renew the bias-up signal. Its next higher objective is 2733.00, and then 2741.00. Neither is required of a renewed signal. And reversing down has room to test the 2721.00 bias-up signal until the bias window starts lapsing.

Back under 2726.75 (being tested now) would have near-term potential down to 2721.00. The rally could resume from there, but back under 2715.25 would reverse momentum down — probably not just a little if broken soon after exiting the bias environment.

Afternoon bias-down is on thin ice.

The open’s rally to 2675.00 was retraced to 2646.00. Its reaction into the noon hour nearly retraced the drop up to 2674.00. That was retraced entirely back down to a lower low at 2640.50, retesting the 2641.25 opening print, and yesterday’s 2643.00 close.

Bounces are failing, but positive territory is holding.

This afternoon’s 2656.75 bias-down signal triggered cleanly after already having fulfilled its 2651.25 bias-down target. Regardless of having tested and now also retested the bias-down target, probing back above the bias-down signal during the bias-down window would require being retraced.

And the bias-down signal is being probed as resistance now.

Slow-playing a recovery for now is the best chance to rally when the bias environment lapses. Otherwise, exiting the bias environment under its 2651.25 bias-down target is the best chance to resume the decline targeting yesterday’s low.

Noon hour range hangs on to the lows.

The bias environment’s reversal down from 2707.00 had extended to 2682.50 before the bias environment began lapsing. A bounce resolved down to enter the noon hour even lower at 2679.00. And the noon hour extended down to 2666.00.

A lot of selling pressure, and almost all developed in positive territory. This afternoon’s 2679.00 bias-down signal triggered late AFTER having fulfilled its 2669.75 bias-down target. Twice. Its retest isn’t required, and it won’t become “unfinished business” if not retested. But it’s still an attraction during the bias-down environment.

Back above 2684.50 would start to signal momentum reversing up. I would expect it to behave like a short-squeeze relief rally IF it catches at all. Relief from what? Relief from the bias-down environment not extending down through the afternoon, which it’s free to start doing.

Bias-down rally underway.

This afternoon’s bias-down triggered under 2699.25. Its 2691.00 target was met already to within 3 ticks during the noon hour. It’s still an objective, but won’t become “unfinished business” if left outstanding.

Fresh lows through the bottom of the hour would have reinforced the bias-down. Back above the 2699.25 bias-up signal through the bottom of the hour would have invalidated the bias-down. Neither happened.

Regardless, this pattern has potential for a bias-down rally anyway. Which seems to be developing, now probing fresh session highs up to 2708.00. Trending above the bias-down signal during a bias-down environment is sponsored by weak hands, and doomed to failure.

The bias-down rally’s objective remains 2715.50, and the likely resolution is the same as at this morning’s test of 2695.00-2697.00 — to reverse back down. Retesting 2699.25 and then extending higher would no longer be sponsored by weak hands.