Mid-day Update

Is it a trail to find its way back down?

Friday’s session was inert, retracing two intraday trending attempts in either direction, to close unchanged with its open. Not equilibrium, which would be unlikely to trend, at all. Today’s session has been neither, as trending has developed in both directions.

Down, at least. But only to probe under Friday afternoon’s 2907.50 low, and not back into “lower prior highs” beginning at 2898.00. Now the noon hour’s ranging has firmed up to this afternoon’s 2908.50 bias-up signal. Back under 2905.50 would start to signal the noon hour’s bounce had ended, and that the balance of the session would try resuming its decline.

It’s too late to trigger bias-up, or to invalidate no-bias. Probing above 2908.50 now would be “no-bias trending” that requires retracement. Holding 2908.50 until the bias environment begins lapsing could probe overnight highs — and fulfill the outstanding requirement for another trend high close.

MARKET WRAP IS 30 MINUTES EARLY AT 3:03 ET (I’m away from the screens for the last half-hour).

This morning’s reaction down to its 2904.50 target got 3 ticks deeper before bouncing 3 points on oversold RSIs. RSIs diverged positively into a lower low at 2902.50, which also tested the 38.2% retracement between yesterday’s close and today’s gap up.

With the morning’s bias environment ending, the reaction’s sponsorship was likely done. More so, being a Friday, the morning’s bias-up undercurrent was likely to persist through the noon hour. The setup was likely to bounce.

The bounce’s objective at 2910.00-2911.00 held its test. Also being the bias-up signal, this is now a no-bias environment. So, 2911.00 should define the window’s upper-end.

Trending higher into the weekend is possible — again, it’s Friday. No-bias trending during the no-bias environment is possible, too — same reason. Never underestimate Friday afternoon trending when a morning counter-trend attempt has failed. Meanwhile, no further upside is required, and there remains vulnerability to the downside.

Lower lows still not trending down.

When this morning’s bias environment began lapsing, its relatively narrow 2892.00-2897.00 range broke lower. Sharply. Suddenly and steeply, but not substantially. Just 2-3 minutes of plunging to 2885.25 ended it. Oversold RSIs at the low require its eventual retest.

Recovering up to 2892.00 through the noon hour has resolved down, too. Just not substantially, only attacking the low to within 5 ticks, leaving its oversold RSIs outstanding.

Ratcheting lower and lower could be considered trending, if not contained within a prior window. Like this moring’s drop, which has only retraced to yesterday’s last 60-90 minute low. Not quickly rejecting its retest could replace 2902.00‘s attraction above with a collapse below. Meanwhile, exiting the bias environment rallying above 2892.00 would be credible for extending back to and through session highs.

Sloppy, choppy ranging about to abandon its inhibitions.

The open’s bouncing around persisted through the morning, and now also through the noon hour. The morning’s noN-bias is followed by this afternoon’s no-bias signal. The market continues to be inhibited by anxiousness ahead of FOMC Minutes due at 2:00 ET. By the same token, the market continues to be vulnerable to volatility triggered by the Minutes.

We know the catalyst is being greeted prior to probing fresh highs up to 2902.00 or higher. And also that reacting to the news beyond this afternoon’s 2886.00-2891.50 bias signals would be no-bias trending that requires retracement. So, an initially favorable knee-jerk reaction up — especially if it touches 2902.00 — might be unable to withstand the attraction back down, which could become exacerbated into reversing the trend down.

Similarly, a knee-jerk reaction down — especially if it visits 2981.00 — could reverse up sharply.

Exiting the bias environment beyond either of its 2881.00 or 2897.25 bias targets would invalidate the required retracement. Regardless, volatility is about to come alive, with more predictability than this morning’s sloppy and choppy.

Defensively posturing today ahead of tomorrow’ FOMC Minutes?

Not only the afternoon’s FOMC Minutes release, which the past two have been unusually influential to triggering wild intraday volatility. But also the pre-open ECB policy statement and typically wild Mario Draghi press conference.

If the market intends initially to react favorably, and significant resistance begins at 2902.00, then 2897.00 was a little too close two days out. Too, too close.

The open’s drop to 2880.00 has solved that problem. Even after bouncing to within 2-3 ticks of its 2891.50 objective, and not because that is reacted down to 2883.50. But the room back up to the high and through can begin gradually retracing this afternoon while still leaving room for favorable reactions.

Meanwhile, a session-long decline setup is officially disqualified, at least for having avoided two fresh lows. But it was always suspect, so no surprises there. None of which prevents a fresh low, but bouncing remains likelier.