Mid-day Update

Extreme target met, exceeded, and then some.

Having managed the pre-open breakout attempts above 2914.75 to restrain optimism, any early rally attempt was likely to extend. And any rally attempt not rejected would target the 2926.50-2928.00 room for noise above.

That became official by renewing the bias-up signal above its 2920.25 bias-up target at 10:15. It was tested before coming within view of the bias environment lapsing. And it was probed up to 2932.00 as the bias environment began lapsing. On the way to attacking 2940.00 soon after noon.

Its reaction down stopped 1 tick short of rejecting the afternoon’s 2935.00 bias-up signal, which was triggered. Its 2942.75 bias-up target is in-play. It would become “unfinished business” if left outstanding, unless the bias environment were exited under its 2927.25 bias-up signal.

We’ll review the bigger picture during the Market Wrap, specifically the retest of Sep-Oct highs and the potential for new highs to be reversed aggressively.

Flat-to-higher ranging around unchanged.

Opening at this morning’s bias-down target held the 2899.00 pre-open low. Its reaction held 2-3 test of Thursday’s 2908.50 cash session close. An extremely narrow 2-3 point range since noon has fluctuated around 2908.50.

If this morning’s bearish setups were at all influential, then it is in their ability to restrain a recovery. Recovery has been the market’s natural state since the open, however restrained and now gradual it has become.

The market is expending a lot of buying pressure with diminishing immediate returns. The difficult task is to get away from unchanged at Thursday’s close, which isn’t just natural resistance or support but also an attraction.

Extending higher gradually into the bias environment lapsing might only stretch the rubber band to snap back down into a collapse. Otherwise, all of this chipping away at resistance should almost literally explode higher.

Bounce now opens the door to a reversal.

This morning’s decline to 2895.00 was recovered back above the morning’s 2899.00 bias-down signal. Twice. Two probes under it, recovered back above it. And the bias environment was within view of lapsing. Sellers were done, as I described during the pre-open Market Tour.

Reversing up almost relentlessly since then has stopped 1 tick short of its potential up to 2910.00. It’s also this afternoon’s bias-up signal, which did not trigger.

An inflection point would trigger above 2908.75, and could produce no-bias trending . Otherwise, back under 2905.75 would start to signal the bounce had ended. The vulnerability to resuming the decline is less likely than simply drifting lower into the close.

Still scraping session lows.

Having held a test of the 2906.50 bias-down signal this morning, an offsetting test of its 2914.50 bias-up signal was put into play. With a lot of caveats. It was a late signal, the bias-up signal had been tested already, actually both bias-up parameters had been tested and rejected.

But the late no-bias was still good for a bounce up to 2911.00. And the 2906.50 bias-down signal held until the bias environment began lapsing. Then it was probed into the noon hour down to 2900.75. That’s within 1 tick of Monday’s low.

The afternoon bias environment signaled no-bias. Its 2903.75 bias-down signal is being tested now as support, and should define the window’s lower-end like this morning’s 2906.50 bias-down signal did for its window. Probing lower prematurely would required being retraced, but the decline is free to resume unimpeded by 2:30.

Bouncing would still target 2914.50, although its test isn’t required. And probably also the 2923.00 opening print, although it can remain unfilled without impeding a decline.

Another gap up being used for distribution.

Unfinished business above remains outstanding at the 2921.25 “new Globex trend extreme,” which requires intraday retest, often the same day. The 2919.25 opening gap above all prior highs wants to be filled, too. Neither is required to be tested within any particular time frame, and a deep reversal down could develop in the interim.

A deep reversal down is trying to develop now. At least, it tried to develop this morning. Post-open action dropped 7 points from testing the 2919.00 bias-up target’s resistance to test the 2913.00 bias-up signal’s support. While 2913.00 defined the window’s lower-end as advertised, it has continued defining the noon hour’s lower-end, too.

Now no-bias has triggered, and the next 45-60 minutes should be range bound. That range includes the afternoon’s 2908.00 bias-down signal, which would fulfill a probe into negative territory. Unfinished business above wouldn’t prevent extending lower, but would inhibit it anyway. Otherwise, back above 2915.50 would start to signal the unfinished business may be in-play, first.