Mid-day Update

Back to ranging at the lows.

The open didn’t gap up above any relevant level (or gap up at all) to even try negating the traction sellers gained yesterday. Lower lows were likely. None of which prevented surging at the open, but only to touch the 2907.50 bias-up signal — and then not to trigger it.

That put into play an offsetting test of the 2898.25 bias-down signal. The open had been greeted there. So, a test of it was in-play, but not testing it wouldn’t be required. It was tested anyway, as the bias window lapsed.

Extending lower during the noon hour tested unfinished business at 2892.25. Piercing it by 2 ticks was enough to launch a reaction attacking 2898.00, and to avoid triggering bias-down.

Sellers are probably done for the day. Buyers may be done, too, although there’s room up to the 2899.00 bias-up signal and then higher after the bias window starts lapsing. But even if thee’s a bounce back under 2893.75 would start to signal lower lows into the weekend, next targeting 2884.50 down to 2880.25.

New tariffs news triggers plunge.

Today’s signals have probably been impacted by volume contracting ahead of the 3-day holiday weekend. This morning barely triggered noN-bias, and used the aimless environment to range choppily sideways.

Now this afternoon’s cleanly triggered 2911.00 bias-up signal has stalled under 2913.00, and then collapsed to 2899.00. The stalling may have been related directly to volume, but the collapse is indirectly related — the low-volume environment has magnified the reaction to a China trade war tariff headline.

It’s too late to exit the bias window under its 2895.50 bias-down target, so the 2918.00 bias-up target becomes “unfinished business” above. Back above 2903.00 (being tested now) could start that recovery. But back under 2900.00 would more likely extend the decline.

Post-open surge extends up sharply.

Ranging relatively narrowly at or under this morning’s 2902.50 bias-up signal did eventually break higher in time to invoke the grace period. And it did trigger. Consolidating at its 2909.00 bias-up target developed an Ascending Triangle continuation pattern, which also eventually broke higher.

This morning’s 2916.00 high has since held as resistance, while an extremely narrow noon hour range hovered there.

Beware the first break from an extended narrowing range, which is often false. Especially if it’s alluring. So, almost literally exploding higher would be vulnerable to reversing back down, especially without triggering the 2818.00 bias-up signal.

Otherwise, the most bearish scenario for this afternoon may be sideways ranging, backing and filling to the 2908.00 bias-down signal. The morning’s vulnerability to reversing the trend down is much less so this afternoon… at least, until the final hour.

Working off an overbought, and more.

Rallying straight down from the open through noon has opened the door to an even deeper pullback. But still only temporary, because of another door opened at the high.

Literally, at the high. Or, highs. Complexity during the 2906.25 overnight high formed a “new Globex trend extreme.” The setup requires intraday retest. And the 2903.00 opening print is above all prior highs, requiring it to be filled from below. Neither retest must fulfilled today.

The door that opened to a deeper pullback is from breaking under the 2900.00 bias-up signal to trigger the morning’s  no-bias signal. An offsetting test of its 2892.25 bias-down signal has become “unfinished business below.”

This afternoon’s bias window is bouncing to attack its 2901.50 bias-up signal. It’s unlikely to be triggered during the no-bias window. The window starts lapsing soon, and the unfinished business can below can be left outstanding by a retest of the highs — with room up to 2909.00. Otherwise, the pullback is free to resume.

War with Mexico ends with a celebratory event.

Il faut acheter au son du canon et vendre au son du clairon? Warren Buffet is reported to have cited this quote, “buy on the cannons and sell on the bugles.” The war with Mexico has ended — or, at least, the trade war against the world, Mexico division. Now, music!

So, the next higher objective is this morning’s doubly-renewed bias-up target at 2900.00. The noon hour attacked it to within 3 ticks, (to within 1 tick of the afternoon’s bias-up signal), while RSIs diverged negatively. The entire noon hour hovered narrowly at its highs, until exiting the noon hour in decline.

Back under 2896.00 would signal momentum reversing down. This afternoon’s 2893.00 bias-down signal would need to define the window’s extreme if tested, which could mean recovering from 2886.25 or 2883.75. Rallying through 2899.50 by 1:30 would have no such restraint on the upside.