Mid-day Update

Artificial surge steals spotlight from organic recovery.

The open’s potentially bearish setup, which failed its attempt to fully form, didn’t prevent dipping temporarily. The bearish setup would have trended down all morning, but the 2884.50 bias-down signal was able to fulfill its 2879.00 bias-down target (to within 2-3 ticks) and then recover.

In fact, the 2884.50 bias-down signal was recovered as the bias environment was coming within view of lapsing. Actually, 2-3 minutes early, but that’s not a deal killer. Its recovery surged to touch the 2895.25 overnight high.

But the artificial catalyst made the surge likely to be retraced to its origin. Which it was, by noon, back down to 2882.75. Now the afternoon’s 2888.75 bias-up signal has avoided triggering, and also avoided holding. This is a noN-bias environment — the bias-up target is not in-play, and neither bias signal is required to hold if tested.

Back above 2888.00 would start to signal another rally effort underway. In the absence of headlines, the organic effort should produce fresh highs. Meanwhile, back under 2885.00 (being tested now) would start to signal a deeper dip uderway.

Volatility missing along with volume.

A choppy, albeit narrowly ranging morning held between 2878.00-2884.00 until the noon hour. Nothing much changed except to test the afternoon’s 2877.00 bias-down signal, which held. This is a no-bias environment.

This afternoon’s no-bias window inhibits extending down to this morning’s lower objectives at 2771.00 and 2864.75, as 2877.00 should define the window’s lower-end. Breaking lower before the bias window begins lapsing would be “no-bias trending” that requires being retraced. Breaking lower any later would be free to extend.

Meanwhile, today’s lower volume keeps the pattern vulnerable to another bounce, for the same reasons it inhibits trending. Another bounce would target a retest of the morning’s highs while still being likely to resolve down.

Tariff headline derails recovery.

A funny thing happened on the way to an afternoon short-squeeze. The morning’s fresh trend extreme at 2865.00 had been recovered in time to avoid triggering the 2875.25 bias-down signal. And that was after also testing the 2868.75 bias-down target. Offsetting tests of both bias-up parameters were put into play.

But it was still a bias-down environment, so the window needed to be exited back above 2884.50 for confirmation that momentum had reversed up. In fact, 2884.50 was tested as the bias environment began lapsing.

A good effort, and probably on its way to being successful. But it was already retraced down to an inflection point at 2877.00 into the noon hour.Being in proximity to triggering a signal, then rejecting it, is almost tantamount to triggering the opposite signal. At least, the pattern becomes hyper-vulnerable to a reversal, which a tariff headline exploited in a very big way.

Plunging to 2868.00 has ranged sideways back up to 2874.50. This is essentially the afternoon’s 2868.75-2875.00 bias parameters. Bias-down triggered, and its bias-down target is already met. More important, sellers that were almost marginalized are refreshed, while buyers have been trapped ahead of the weekend. Potential down to 2857.00 is only growing.

Room for noise being probed.

This morning’s drop eventually extended down to 2869.00, well under the 2882.25 bias-down signal. Bias-down didn’t trigger, and noN-bias was narrowly avoided, but we gave it a benefit of the doubt anyway because of the 1-tick difference.

Room for noise under yesterday’s low down to 2875.00 was itself exceeded by 7 points down to 2869.00. A close-quarters Double Bottom bounced only to test 2878.00 into noon, and the noon hour’s exit tested 2868.00.

This afternoon’s 2871.00 bias-down signal has held its test to trigger no-bias. And now RSIs aren’t simultaneously oversold at the low. No timing window has yet recovered a relevant level like 2880.25 or 2884.50 to invalidate the decline. Back above 2875.25-2876.00 (being tested now) would start to signal a recovery underway. Back under 2870.00 would signal the recovery had failed.

A lot of selling, so far holding support.

The open’s dip to 2886.25 was retested after this morning’s noN-bias environment had bounced to test 2901.00. The noon hour’s fresh low at 2885.50 was itself retraced up to 2994.00, avoiding the 2890.25 bias-down signal.

Probing under 2892.25 was likely to test the next lower objective at 2884.50. Coming to within 1 point and then triggering a buy signal would not be a deal killer to potential for rallying this afternoon. It’s a calculable support, so not touching it isn’t necessarily excessive optimism.

But while bias-down may not have triggered, it can still be invalidated through 1:30. Avoiding that, or even no-bias trending under 2890.25 can derail an afternoon rally. Yet, having held two more tests of 2888.00 and not triggering bias-down, the burden of proof is on sellers.