Mid-day Update

Morning rally officially rejected.

A fresh high above the 2730.00 bias-up target’s initial test held its 2732.25 resistance. Reversing down from there through the bias environment exit tested 2724.00. Fresh session lows during the noon hour at 2719.25 were recovered up to 2724.50 before entering the bias environment.

Rallying today is still unlikely, so the most bullish scenario may be flat-to-higher.

Flat-to-higher may also be the likely scenario, bullish or bearish. Trending into negative territory after maintaining positive territory is difficult enough. More so after fresh session lows already recovered one probe. More so after triggering no-bias. And more so being a Friday afternoon, which is difficult to attract new sponsorship.

Probing fresh lows during the no-bias environment would still be credible for down to 2716.00-2718.00, but require being retraced. Flat-to-higher up to 2728.50 or 2730.50 would be likelier if still not probing negative territory when the bias environment is lapsing.

Next higher objective pushes back.

Testing this morning’s 2710.25 bias-up target caused a half-hour consolidation. A narrow consolidation. A temporary consolidation. The rally had already resumed before the bias environment even came within view of lapsing.

The next higher objective of 2721.50 was still outstanding when the noon hour was entered. Testing it halfway caused another consolidation. Also a narrow consolidation. And also temporary, as the noon hour exit pushed higher.

That push proved temporary, too. Touching 2725.00 was also still overlapping the afternoon’s 2722.75 bias-up signal in time to invoke the grace period. Lower lows at 2719.00  rejected the bias-up altogether.

This afternoon is a late no-bias environment. If tested, its 2709.00 bias-down signal should define the window’s lower-end. But not after the window lapses, which would then be free to trend down further. Nothing requires trending down, and the bias environment lapsing is also free to recover 2722.75 bias-up signal to resume the rally through the close.

Noon hour rally extending sharply higher.

The first hour’s multiple wide swings weren’t offering much information to its ultimate resolution, or it was offering plenty of contradictory information. But we knew its ultimate resolution would be substantial. In fact, dipping to test the 2674.00 bias-up signal down to 2672.00 during the bias-up environment created a slingshot effect that resumed the overnight rally.

But that’s not substantial. This is:

The noon hour’s entry was soon retesting Monday’s highs up to 2684.25. Not much later at all, attacking the morning’s 2681.00 bias-up target and then the afternoon’s 2688.75 bias-up target. The afternoon’s 2693.00 renewed bias-up target was part of a consolidation, but it has resolved up to the next higher objective above 2684.25, which is 2696.75.

1-minute RSI is diverging negatively, while overbought 3-minute RSI is at least no longer persistently overbought. Nothing requires extending higher. Reacting down a little could mean reacting down a lot, especially back under 2693.00. Not reacting down at all could mean extending a lot, with the next higher objective being 2721.50.

Probe of fresh lows snaps back into the range.

This morning’s noN-bias environment had no attraction in-play, either above or below. So, recovering yesterday afternoon’s slide was unlikely, but a rally attempt would still be likely to probe above the 2672.00 overnight high. The overnight high was probed by 2 points, but only momentarily before reversing back above yesterday’s lows.

And lower. Gradually at first, and then suddenly blipping-down to 2657.25. Down, and back up above yesterday’s lows, again. Not triggering the 2662.00 bias-down signal has improved to touched 2666.00.

Obviously, the President’s impending JCPOA announcement is a culprit. Dueling headlines have thoroughly confused the market between leaks, fake news and press releases. The actual knee-jerk reaction may have room to run.

Overnight, morning and now noon hour probes under yesterday’s low aren’t extending down. But until their reactions are actually reversed up, the probes are chipping away at support. And having probed fresh session lows during the noon hour, this afternoon is likely either to rally, or likelier to etxend the decline.

It may also be to fall behind.

Two setups triggered by surging through the open to probe the 2674.00 bias-up target, and maintaining that recovery through 10:15. First, the bias-up signal was renewed, next targeting 2684.25. Second, a position of strength was created to help absorb counter-trend sponsorship.

That second setup has had a workout. Despite retracing the open’s 10-11 point surge, the morning bias environment had recovered it all to within 5 ticks. The noon hour came within 2 ticks. The first setup remains unmet.

A renewed bias-up target is not a requirement, so 2684.25 need not be met. It’s the room for noise above 2674.00, which every leg is overlapping — and not rejecting — but not yet trending through.

The position of strength is not indefinite. Its influence over dips is further depleted on every use. Rising bottoms on each use suggest there’s accumulation, but that’s not a signal.

And now this afternoon has triggered no-bias. Fresh highs would get a benefit of the doubt for extending higher regardless of the environment. But another dip might find the position of strength has become ineffectual optimism, offering no more support or recovery.