Mid-day Update

Post-open collapse holds support.

The minimum likelihood for a session-long rally was fulfilled by at least probing a fresh high the following morning. Vulnerability to collapsing is usually delayed until that afternoon, but this morning couldn’t be bothered to wait. And, why not. Yesterday’s action barely qualified as a rally, overnight action initially dipped, and Friday Factors can exercise unusual influence.

Also, the fresh high touched the 2680.75 bias-up target to within 1 tick. Actually touching it was necessary to actually reject it. So, having failed to trigger its 2672.00 bias-up signal, an offsetting test of its 2648.25 bias-down target isn’t actually required. But it’s likely if the 2654.00 bias-down signal fails to hold.

About that. This morning’s 2654.00 bias-down signal held. it was probed down to 2651.00 after triggering no-bias, and it was recovered before the bias environment began lapsing. Breaking it is now difficult. That doesn’t necessarily default to a rally, although that’s now easier.

About that. This afternoon’s 2667.25 bias-up signal held. It wasn’t touched in time to trigger, not until 1:30 when it could still be recovered to invalidate this afternoon’s no-bias environment. It didn’t. It should define the window’s upper-end.

Back under 2662.50 would start to signal another test of 2654.00 likely. Otherwise, exiting the bias environment at or near 2667.25 would be more vulnerable to drifting higher into the close.

Session-long rally setup got set-up.

Maintaining the gap up above yesterday afternoon’s highs had formed a session-long rally setup. Extending it produced a fresh session high during the bias timing window. Extending into the morning bias environment probed its prior timing window high. And although it took several hours, the noon hour exit probed its prior timing wnidow’s high.

Interesting. All but one timing window tends to probe its prior timing window high on session-long rally days. Usually the noon hour is the exception, but not today. Optimism is alive and well. The open’s 16-point surge already suggested as much.

Today is a good example of excessive optimism being vulnerable. Fresh highs testing 2672.00 resistance were suddenly reversed by headlines that a strike on Syria was planned. The reaction down was far removed from the 2660.00 bias-down signal. But it was broken by 1:30, invalidating 1:20’s no-bias signal.

So, this is an invalidated no-bias environment. Its bias signals need not define either end of the window. Its bias-down target is not necessarily in-play. Oversold RSIs at the low will require an eventual retest. But nothing prevent recovering to fresh highs — whether during the final hour, or during the bias environment so that the final hour can tumble.

Flat-to-higher choppiness.

the offsetting tests of this morning’s bias-down signals had put into play at least an offsetting test of 2663.00. It has been attacked to within 2 points, which is too wide to fulfill the objective, so its test remains outstanding.

The noon hour contained the high, probing 5-6 points into positive territory. Reacting down into the bias timing window to 2646.00 recovered the afternoon’s 2650.00 bias timing window in time to avoid triggering it. It’s being probed again now down to 2646.00, and now it’s also too late to invalidate the no-bias signal.

So, probing lower is possible, but it would be no-bias trending that requires being retraced. Its probe would have potential to 2645.25 and 2642.50. Trending is already unlikely while Zuckerberg is testifying to Congress. More so when FOMC Minutes is due at the top of the hour.

Noon hour fully retraces morning rally.

Probing fresh highs up to 2663.00 before the noon hour was suddenly ambushed by a 16-point plunge. Its reaction into the noon hour was gradually retraced and then also ambushed by another 16-point plunge to 2635.00.

That was under the open’s pullback to 2638.50. It was only temporary, eventually retraced to touch this afternoon’s 2658.25 bias-up signal. Its reaction just probed 2 points under the afternoon’s 2648.00 bias-down signal.

Zuckerberg is still scheduled this afternoon. The White House press secretary’s daily briefing will likely be full of salacious and intriguing questions about yesterday’s raid on Trump’s attorney. I’m not expecting the market to accomplish anything new during those distracting televised events.

So, not already trending higher would be vulnerable to retracing back to session lows. Of course, breaking higher before the bias environment lapses would require being retraced, which could become a rubber band stretch that snaps back down.

Duplicate setup suggests bigger move forming.

This morning’s post-open rally extended to test Friday afternoon’s 2634.25 bias-environment high. RSIs diverged negatively on a retest of 2634.25. The tests’ 2630.50 interim low was never pierced before the rally resumed.

That’s one.

The noon hour extended the rally to attack 2646.00. RSIs diverged negatively again on its retest. The tests’ 2641.00 interim low was never pierced before the rally resumed.

That’s two.

And that’s borderline overkill. Negative divergence is not an actionable sell signal. It can inform a sell signal, suggesting it is more reliable if triggered. Two negative divergences can be that much more bearish, making a sell signal that much likelier to produce a substantial reversal. If triggered.

Meanwhile, maybe a much stronger uptrending undercurrent is causing the negative divergences to be ignored. It’s rare, but a third negative divergence would likely extend the rally sharply. This afternoon’s bias-up signal triggered, putting into play 2653.50. It’s likely to be tested, and possibly exceeded, so long as 2644.00 isn’t broken as support.