Mid-day Update

Still consolidating the post-open’s surge.

Yesterday’s 2936.00 highs held as support as the morning’s bias window lapsed. Sellers did not regain control. This doesn’t prevent dipping anyway to 2933.00-2934.00, but probably still recoverable due to the morning’s position of strength holding above 2936.00.

Meanwhile, this is a no-bias environment. It’s a little late for “no-bias trending” to probe higher, so the next 45-60 minutes is likely to range sideways. Hovering until then at or under the 2941.50 bias-up signal would be vulnerable to breaking higher through the close.

In the bigger picture, the pattern all but requires probing fresh highs. Nothing can prevent another detour down — whether limited like the past several opening surges met, or something more protracted like the prior week. But the next higher objective is 2947.50-2950.00, and then potentially 2975.00-2977.00.

Post-open dip reverses to fresh session highs.

This morning’s no-bias environment tested and retested its 2925.25 bias-down signal, but only after 10:15 when it was too late to trigger. Probing it after 10:30 was “no-bias trending” that required being retraced.

And it was. A surge recovered the open’s 2930.75 high, and ranged around it until the no-bias environment had begun lapsing. Then another surge extended up to 2936.00.

The rally might have extended if not for headlines from a Fed Chair speech that triggered a drop to 2931.00. The knee-jerk reaction has been recovered to attack 2935.00, but this is another no-bias environment. Breaking above its 2937.00 bias-up signal when the window starts lapsing would be entirely credible for extending higher.

Post-open gains retraced.

The gap up to 2933.75 happens also to be this afternoon’s calculation for a bias-down signal. It was tested during the noon hour down to 2931.25, but held to trigger “late no-bias.”

Momentum reversed down thanks to a correction triggered under 2938.75 and targeting the 2934.00 area. Its target was fulfilled by a 5-point spike down to 2932.00.

An inflection point at 2934.50 is now being tested to try reversing momentum back up. Its test is including a reaction back down to attack 2932.00.

The 2931.25 low can be retested by several ticks, and then down to 2928.00-2929.00. Any lower would start to suggest something more substantial than just a normal correction on the way back up to new highs.

Sellers take another shot, and miss again.

This morning’s opportunity to trend down was not exploited, as I described in the post-open review. Being a Friday, with participation thinning out sooner than during other sessions, there’s usually only one chance for sponsorship.

A trending attempt isn’t required at all, and patient, strong-handed sponsorship wouldn’t start a fight it couldn’t win. So, a failed attempt reflects impatient, weak-handed sponsorship. Other sessions might see strong-handed sponsorship try later, but rarely on a Friday.

So, this morning’s sellers ultimately failed to trigger the 2916.25 bias-down signal. An offsetting test of its 2924.50 bias-up signal was fulfilled by 1 point at the morning’s high.

Now another opportunity for sellers to gain traction has presented itself. And sellers have again failed to exploit it. Already testing a sell signal at 2921.25, the FB headline triggered a 7-point plunge to 2915.50. The pattern’s bounce limit was violated, and this afternoon’s 2919.00 bias-down signal wasn’t triggered.

Opportunity missed. Knee-jerk reactions to news are the product of weak hands, anyway. And the headline’s origin is now retraced up to 2923.50. The no-bias environment could extend up to its 2926.00 bias-up signal, or dip to its 2913.50 bias-down signal. Either could break after the bias environment lapses — and trend up if the lapsing probes above the morning’s 2925.50 high, or down under 2919.00.

Meanwhile, closing under 2919.00 and 2914.00 would start to contradict the bottoming pattern we’ve been tracking. So, further downside today is less likely, or likely to be recovered.

Limits of a corrective bounce are met.

The 2907.50 low of yesterday’s drop is likely to be probed at some point before a durable recovery develops. So, interim bouncing is likely to be only a temporary correction. A bigger and bigger bounce would start to suggest otherwise, but not arbitrarily — not without recovering some relevant level through a relevant window.

It helps to begin from a relevant level, too, like from recovering 2914.00 and 2919.00 through this morning’s open. Even that only produces a position of strength, which makes another drop likely to recover… for example, from retesting 2907.50.

Anyway, today’s bounce has extended through its 2927.00 renewed bias-up to attack this afternoon’s 2933.25 bias-up target. The probe above 2927.00 was isolated to the noon hour. And “late no-bias” just triggered for this afternoon’s bias environment.

Nothing requires extending this morning’s rally. Not extending higher would be vulnerable at least to backing-and-filling Extending higher anyway could retest Friday’s 2945.25-2947.00 highs, and still be vulnerable to reversing down.