Mid-day Update

Gap up holding, not extending.

The open’s gap up to 2742.00 had extended quickly to 2749.25. Then it was retraced entirely through the first hour, more so down to 2740.50. Dipping into the bias environment exit held a retest of 2740.50.

Bouncing through the noon hour held this afternoon’s 2747.00 bias-up signal. A blip-up pierced it, but it was almost still being tested at the bottom of the hour. This is a no-bias environment.

Without resuming the open’s run, the gap-and-run is just a gap. Gapping is neither bullish nor bearish — that’s the resolution’s job to define. Gapping up and not running isn’t bearish. Gapping up and running and retracing can be bearish, but can still be recovered.

That’s where the market is now — gapped and ran, then retraced back down to the gap. Resuming the rally would be bullish. Extending down any deeper would be bearish.

Upside influences lapsing.

This afternoon’s 2735.00 bias-up signal just triggered, late with the grace period’s assistance. That was by a narrow margin of 2 ticks, despite having been to 2737.00 just minutes earlier. And 2735.00 was touched only a couple of minutes later, which would have triggered noN-bias.

So, take this afternoon’s bias-up signal with a grain of salt, or trade it carefully.

Today’s rally was relying on an afternoon bias-up to help it extend higher. Friday morning’s bias tends to persist through the noon hour, but that window has lapsed. Also, Fridays rarely trend throughout, so even the gap-and-run setup’s influence has lapsed.

And now 2735.00 is being probed as support. It’s also the rally’s current pullback limit, so it’s on the verge of being violated. The sell signal currently at 2731.75 can be threatened under 2733.00. But there’s no requirement otherwise to trend in either direction, as Friday afternoons are difficult to attract sponsorship or reinforcements.

Pre-open break retraced only by proxy.

The likelihood for retracing the late pre-open break from 2727.25 is diminishing as this afternoon’s bias environment starts attacking the morning’s 2707.00 low. The interim bounce was still somewhat successful, probing back above the open’s highs. Also, its 2722.00 peak retraced 61.8% of the pre-open portion of the late break.

And now triggering this afternoon’s 2715.00 bias-down signal makes the decline more reliable. And retesting this morning’s low so soon makes its support less reliable. Extending any lower could target Tuesday afternoon’s 2691.00 “lower prior highs.”

A path higher remains possible, since retesting this morning’s low would also neutralize the required retest of its oversold RSIs. And this afternoon’s 2707.50 bias-down target has been met already, satisfying its selling pressure. So, a quick reaction up that recovers 2713.75 could shift sentiment very quickly to optimistic.

Relentless intraday rally testing a lot of resistance.

Today’s session is decidedly different from yesterday. On its face. There are interesting commonalities beneath the surface.

Gapping down Tuesday and trending down sharply is different only directionally from today’s gap up that has trended higher. Each session was drawn by attractions that were neutralized but broken. And neither has confirmed its trending is durable.

Being similar, today’s pattern should resolve differently. Yesterday reversed from a fresh session low back up to a prior high, stopping short of signaling momentum had reversed up. Today’s pattern doesn’t have a similar prior low to retrace, but its upside momentum can be contained by closing back under 2715.00. And closing under 2711.00 can signal momentum reversing down.

Of course, the other different resolution is not to reverse down, at all. This afternoon’s 2727.25 bias-up target was met at 1:20 and it’s still being tested a half-hour later while RSIs finally diverge negatively. Exiting the bias environment high by ignoring the target’s resistance and the technicals’ drag would be likely to probe above 2733.00.

Regardless of today’s resolution, and while awaiting it, keep in mind that this week has already indicated a pattern of quick turns and strong trending. Be careful not to get caught for too long on the wrong side of a move.

Two 30-point plunges in 10 hours seems to have a message behind it.

Actually, the second plunge was 33 points. The 30-point plunge had produced the 2690.25 overnight low. Bouncing 19 points into and out of the open was not unimpressive, but it’s all relative, and peaked upon retracing 61.8% of the first plunge. The second plunge slid into the noon hour’s 2676.50 low.

That’s about 55 points under Friday’s close. And it expends a lot of selling pressure. It fulfills a lot of selling pressure, too. The morning’s bias renewed the bias-down target next targeting 2679.00-2683.50. And it comes within 1 tick of this afternoon’s 2676.25 bias-down target.

The market seems to have noticed all of the selling pressure, and the relevant levels being tested. The noon hour reacted up to 2691.50. And its 11-point reaction down extended too late to trigger a late bias-down, holding the afternoon’s 2683.50 bias-down signal.

Bias-down narrowly avoided triggering. And the 11-point reaction down is now probing under the 2683.50 bias-down signal. I’m giving sellers a benefit of the doubt for at least a fresh low, if not also to extend the drop this afternoon or tomorrow. But since they’re already trying, they had better succeed. Otherwise, exiting the bias environment back above 2695.50 could extend sharply higher.