Mid-day Update

Support chipped away.

A 6-point range between 2713.00-2719.00 has developed since this morning’s bias environment started lapsing. The open’s swings were wild, surging 5 points up to 2719.50 and plunging 10-11 points to 2709.00. But they weren’t so wild that the market should be so stunned. Extended periods of wide gyrations can earn periods of calm to compensate. This is not that.

Expirations are always a wild card. If their opens aren’t already trending or trying, then it’s difficult to start trending later. But this is not that, either. Today’s open did try to trend, both up into 2718.50-2719.25 resistance and back down again, twice. Developing almost exclusively in negative territory.

This afternoon’s 2713.25 bias-down avoided triggering. Its support is not being exploited. Instead, price has been hovering there, ranging narrowly, as it did through the noon hour’s second half-hour. The bias-down signal should define the no-bias environment’s lower-end until at least coming within view of lapsing. Expiration’s wild card suggests taking seriously any break lower.

As does the bearish WedEX. Two earlier setups today had potential to reverse up — the late no-bias, and the recovered plunge. Is the bearish WedEX influence already pressuring prices lower? Regardless, the indicator doesn’t require a steep slope or substantial drop. But it should at least absorb and retrace bounces. Back above 2719.00 would make downside difficult.

Weak-handed rally corrected, not yet reversed.

This morning’s 2725.75 bias-up signal held a clean test to trigger no-bias. It broke later up to 2732.00, requiring its retracement. Which the noon hour did, down to 2720.50. This afternoon’s 2721.50 bias-down signal avoided triggering. So, this is a no-bias environment, with no objective in-play.

But the 2721.50 bias-down signal is still  an influence. It should define this window’s lower-end.

This morning’s bias-up signal was supposed to do that, and did, ultimately. Just hovering above or around the bias-down signal until the bias environment lapses would be likely to break lower then. But bounces must recover 2726.00 to even begin suggesting a bigger bounce may be underway.

Meanwhile, the bigger picture continues playing out. Rallying prematurely this morning has failed, retraced totally to unchanged. A late afternoon rally would be credible, but not until it starts developing. There’s no requirement to trend again today, so beware of false starts.

Session’s higher highs fill Monday’s gap.

“Nobody eats at that restaurant anymore, it takes too long to get it.” – Yogi Berra

2704.00 was attacked just a half-hour before the open. The noon hour’s high just tested 2727.25. That’s not necessarily strong-handed sponsorship. And if it’s weak-handed, then a reversal back to yesterday’s ~2701.00 lows is likely.

Why is today’s rally not necessarily strong-handed? Earlier, I noted the pre-open defensive posturing. Now the afternoon’s bias-up target has been met during the noon hour, before even being put into play at 1:20. Moves contained to the noon hour can still gain traction by recovering a relevant level, but less so by holding a relevant level’s test. So, the trending probably was sponsored by weak hands.

It’s still a bias-up environment. Exiting it above the bias-up target would suggest that strong-handed buyers have been attracted as reinforcements, anyway. Backing-and-filling during this bias-up environment isn’t very appropriate, and dipping too deeply could trend down through the close.

Open’s drop is getting a little too comfortable.

Already testing 2712.00 before the open — well under this morning’s 2724.00 and 2718.00 bias-down parameters — had expended a lot of energy. But it apparently earned follow-through, and post-open reinforcements pushed lower to 2703.25.

That was the first half-hour. The balance of the session has ranged sideways. The first reaction up exceeded its 2714.00 target by nearly 2 points before reversing back to the open’s low. The next reaction up attacked 2713.00, and blipped-up even higher momentarily as the noon hour was ending. But now the 2703.00 is being attacked again.

The constant support and descending resistance forms a Descending Triangle, except that it doesn’t — I don’t begin my patterns at gaps open. But the pattern isn’t accumulative. And while a recovery today is possible, it won’t be credible from under 2714.00, unless a probe of fresh lows is rejected first.

Target’s test fails earlier… dips deeper?

This morning’s retest of its 2739.25 bias-up target and of the 2741.00 overnight high got to 2741.25. Trending down since then fell initially to the morning’s 2733.00 bias-up signal while the bias environment was lapsing. Now it has extended to trigger the afternoon’s 2730.50 bias-down signal.

Quickly fulfilling this morning’s bias-up target allowed its earlier rejection. But the reversal’s timing was not optimal — breaking lower as late as possible, and including a couple of big blips-up, albeit temporary — so, this reversal isn’t necessarily sponsored by strong-handed sellers.

The bias-down signal was probed down to 2726.25, whose oversold RSIs were just retested. Interim support before the 2721.50 bias-down target is at 2725.25. Meanwhile, the test of 2726.25 is reacting up to attack the 2730.50 bias-down signal as resistance. Another big blip-up? Back under 2725.25 would help to confirm it’s only temporary.