Mid-day Update

REMINDER: I’M AWAY FROM THE SCREENS DURING TODAY’S FINAL HOUR…
ALSO: Market Wrap will be held early at 2:22 ET.

Trending up to this morning’s 2625.25 bias-up signal during the no-bias environment then requires the bias-up signal to define the window’s upper-end. But its resistance was hardly recognized as the rally extended through it to 2642.00.

Being no-bias trending, the retracement down to 2625.25 has become unfinished business below. Often the 2617.00 10:15 print will be tested, too, but it is not a requirement. Reacting down to 2627.00 fulfilled neither of these lower objectives. Meanwhile, there’s a requirement above, to retest overbought RSIs at the 2642.00 high.

Given the impending three days of illiquidity, Friday Factors still apply despite this being Thursday. And they can cut either way — drifting higher through the afternoon without counter-trend sponsorship to stop it, or trading aimlessly flat-to-lower.

Breaking lower would be an anomaly. A steep, deep, anomaly.

Overnight and post-open action hasn’t trended, but it has been very choppy. This morning’s bias signals were tested multiple times each, and that was before triggering no-bias. No-bias trending probed lower, and probed the morning’s bias-down target. The break was recovered to exit the bias environment back above its signal, neutralizing the no-bias trending.

So, while this market may be range bound, it’s not dull and lifeless, but opinionated. One of those opinions is bearish, which sellers expressed as strongly as possible without gaining traction for their effort. And that effort became trapped within the timing window that had attempted it.

Normally, that would be a bottom. Not entirely for this morning’s failed drop, but also because yesterday’s low was probed before recovering. Both held tests of Monday morning’s low. All coinciding with seasonal bullishness that begins its influence this afternoon.

2600.00 is essentially the lower-end of the range. If it’s not breaking lower, then price action into Thursday’s close is vulnerable to gravitating higher. By the same token, if that seasonality doesn’t prevent breaking the range’s lower-end, then the weekend could be greeted at sharply lower levels.

MARKET WRAP WILL BE HELD EARLY TODAY AT 3:03 ET.

Today’s session has been willing to trigger setups. But rather than go on to fulfill them, reversal setups form. And rather than fulfill them, another reversal setup forms. Today’s range isn’t so much range bound, as it is in a tug-of-war battle to influence direction.

The overnight rally only had to maintain through the open for extending the rally to its next higher objective. But the open was greeted back under the overnight rally’s last relative low — 2669.00 — which undermined the rally’s momentum.

The opening dip was deep enough for long enough to reject tests of both bias-up parameters. That put into play offsetting tests  of both bias-down parameters — 2648.75 and 2637.75 — but only got to 2652.50. And the attraction below didn’t prevent rallying…

…Rallying to fresh post-open highs into the morning bias environment into its exit. But the 2671.00 bias-up target was still being overlapped, so the morning’s bias-down parameters have become “unfinished business below.”

And now this afternoon’s 2663.25 bias-down signal has held as support to trigger another no-bias. Keeping with today’s new tradition, that didn’t prevent extending down. A pattern had formed that required fresh post-open lows, which are now being probed down to 2650.00 — which is also natural support at Friday afternoon’s high.

We have two competing influences: One is this afternoon’s no-bias environment. Probing under its 2663.25 bias-down signal came too late to trigger. It must be retraced entirely, unless the bias environment is exited under its 2655.00 bias-down target. That would help the other influence, which is this morning’s unfinished business below, at least to 2648.75.

BONUS: SCROLL DOWN FOR NEW INSTRUCTIONAL VIDEOS.

The open’s attack on 2640.00 had renewed the bias-up signal. But it had also held the three pre-open highs. Dipping back down to their 2626.00-2627.00 interim lows didn’t hold, and the bias environment extended down sharply to 2602.00.

2602.00 was the peak of Friday’s last-minute bounce. Gaps back down to the 2688.00 and 2697.00 closes weren’t filled before bouncing through the noon hour. That’s optimism. And that optimism was well-rewarded by fulfilling the afternoon’s 2633.50 bias-up target.

This afternoon is a bias-up environment, so its 2626.00 bias-up signal should define the window’s lower-end if tested. It’s trying to contain a test now (see nearby chart). This morning’s bias-up signal probed 7-8 points under its bias-up signal before recovering. Repeating that behavior is possible.

The balance of the session isn’t required to trend at all. But it’s free to probe the bias-up target at any time, and to test Friday afternoon’s ~2650.00 high. Similarly, oversold RSIs at the morning’s low require a retest. Combined with it being an optimistic low, it’s likely to be retested sooner rather than later.

BONUS: NEW INSTRUCTIONAL VIDEOS
This morning’s action was rich with examples of reaction limit tests (bounce limit, pullback limit). That included a noon hour re-entry setup that I describe whenever it appears. So, I created two instructional videos for them, only several minutes long each (not including Coming Attractions, Turn-off-your-ringer PSA, and credits):

Reaction limit examples
Noon hour reaction limit head-fake

Isolation setup trying to reject the late-morning collapse.

After having probed under yesterday’s lows, maintaining the open back within yesterday’s range formed an Isolation setup. It typically backs-and-fills during the morning before performing in the afternoon. This morning’s 2642.00-2655.00 range held until the bias environment began lapsing, and then it broke.

Lower.

Collapsing to fresh post-open lows fell back into the overnight range, testing the 2627.00-2628.00 objective. It’s too late to reject the Isolation setup, which would have been as bearish as the setup would be bullish. But it’s too early to invalidate the Isolation setup, which can be reinstated before the close.

Any development will do. Triggering this afternoon’s 2639.00 bias-up signal is a start. But that’s only a start. It was triggered, albeit late, but after the noon hour held a test of the 2627.00 bias-down signal held. The 2646.00 bias-up target has been attacked to within 1 point.

Triggering bias-up must still be productive. Currently, its reaction down has dipped to 2635.00. That’s back under the bias-up signal. Not extending or even resuming the pre-open recovery may only range sideways into the close. But not recovering also keeps the door open to resuming yesterday’s decline.