Mid-day Update

Greeting FOMC events optimistically.

Holding a test of this morning’s 2921.25 bias-down signal had put into play an offsetting test of the 2926.75 bias-up signal. This was regardless of having attacked 2926.75 to within 1 tick at the open.

2926.75 was tested, and its test defined the window’s upper-end until the bias environment began lapsing. Probing it up to 2929.00 was corrected, and now the noon hour is being exited at 2930.00.

2-3 healthy moves. But so far, only noise within yesterday’s range. As it should be, if not already breaking out much earlier, ahead of this afternoon’s FOMC events. Moves are likely to accelerate and extend, so we’ll be keeping up with them in real-time in the chaRTroom.

And testing the range’s ends.

This morning’s no-bias environment triggered without testing either bias signal. Sure, the 2930.50 bias-up signal had been tested pre-open, but that didn’t require an offsetting test of the 2921.25 bias-down signal.

2921.25 was tested anyway at the morning’s low, by 1 point. Still being the no-bias environment, its test was required to define the window’s lower-end. Which it did, combining with oversold RSIs to produce an 8-point bounce testing 2928.00 as the bias environment began lapsing.

Oversold RSIs require a retest, which could have remained outstanding, but the noon hour has been retracing to trigger a late bias-down under 2923.50. The 2918.50 bias-down target is in-play.

Lower prior highs at 2914.00 could be tested, so long as the window were exited back above 2919.00. Meanwhile, just recovering 2927.75 would start to signal momentum reversing up, although that could leave 2918.50 outstanding as “unfinished business.”

Stuck in this morning’s defensive range.

The next lower objective for this morning’s drop was 2921.25, and it was tested as the first hour ended. Its bounce was rejected by a 6-point plunge to test 2918.00 as rumors emerged about a possible DOJ resignation/firing.

Perhaps the first bounce was headed higher if not for the knee-jerk reaction down. That reaction down recovered above 2919.00 to avoid exiting the bias environment with something more substantial in-play. A second bounce got to 2926.00 as the bias environment lapsed.

But price action has only settled in, and settled down, fluctuating between 2919.00-2923.00. This afternoon’s 2921.00 bias-down signal just held to trigger noN-bias. Back above 2924.25 would start to signal a bigger bounce underway, but it’s not required. And waiting for more news or closure makes any trending difficult.

The attraction is holding back today’s highs.

This morning’s 2940.50 bias-up signal triggered cleanly. The attempt to invalidate it failed, while probing back under yesterday’s high, and 2947.50 is now “unfinished business.”

A bounce into the noon hour reached only 2944.00 before reversing back down. And now the afternoon’s 2937.75 bias-down signal is being touched. If  bullish WedEX isn’t influening price higher, then it should at least attract this wrong-way trending back up.

Today’s WedEX has not yet done either.

Back above 2941.25 would start to signal another recovery attempt underway. Otherwise, fresh session lows could test yesterday afternoon’s last relative low at 2936.00 just as noise

Not done, but overdone.

The open’s one opportunity to reverse down from gapping up was under 2927.00. But it was probed by only 3 ticks, and never any deeper than its first 3-4 minutes. It was also the post-open low. Price action since then has trended up relentlessly to 2938.50.

The degree to which the rally has reached doesn’t make it any more vulnerable to peaking, or to pausing, or to reversing. But it just tested this afternoon’s 2936.50 bias-up signal and fail to trigger. This is a late no-bias environment.

Trending strongly intraday to new highs through multiple consecutive timing windows is difficult to reverse. So, reversing down is unlikely. The setup tends to be followed by a lot of buyers below the market, their limit orders acting as buffers to rolling over.

Nevertheless, the futures premium to its underlying cash has contracted by 2 ticks since yesterday, so at least a shallow a pause or backing-and-filling is possible. The no-bias environment has room to test its 2929.50 bias-down signal just as noise. Probing deeper would be “no-bias trending” and require being recovered. That, or after the bias window starts lapsing, could extend down to 2925.00 or 2920.25 if the unlikely develops.