Mid-day Update

Belated breaks bringing buyers.

The open’s gap up didn’t extend, but it was maintained. That wasn’t decisive enough to confirm extending, but sellers weren’t exploiting it. Fresh highs after the opening 15 minutes of volatility were too late to confirm extending, too. Sellers did exploit that, with a very last-minute 4-point spike down to probe the 2849.00 bias-up target and avoid renewing the bias-up signal. But it was still a bias-up environment, and the rally resumed.

Extending the open’s gap up, and/or renewing the bias-up signal would have targeted new highs. A new high followed anyway at the morning’s 2856.50 peak. Barely a new high, no less grudging than the delayed buying spurts preceding it.

But sellers still haven’t retaken control as this afternoon’s 2861.25 bias-up target is met one minute after entering the bias environment. And now it’s being probed by at least 1 point after an interim dip to its pullback limit.

Among my Friday Factors setups is the afternoon bias environment exit on a trending session. Exiting at fresh session highs is incredibly difficult to reverse down — not required to extend, but vulnerable to it anyway. Exiting the bias environment under a prior low or relevant level like 2857.75 would be vulnerable to dropping through the close.

Decline and recovery both getting nowhere. Slowly.

The ranges are different with each timing window. But the market is range bound.

The open’s collapse ultimately triggered no-bias by holding a test of the morning’s 2835.50 bias-down signal. The balance of the bias environment was contained between the 2835.50-2843.00 bias signals. Probing higher into the noon hour was only temporary, and didn’t extend. But its reaction down only touched the afternoon’s 2840.75 bias-down signal, and didn’t trigger.

Back under 2841.50 would be credible for starting to break lower. Especially if the bias environment lapsing is at least within view. Meanwhile, there’s still potential for bouncing back to the highs. This morning’s last dip and now this afternoon’s last dip each had potential to extend down — and didn’t. Probing back above 2848.00 again this late in the day could marginalize sellers.

Extending higher only stretched the rubber band.

The open’s gap up to 2848.00 is above all prior intraday highs. Its brief dip to 2845.50 support recovered as was expected, retesting the 2850.25 overnight high. The retest extended ultimately to 2855.25.

Ultimately, but gradually. This was not a good spot for enthusiasm to wane.

In this morning’s Market Tour I described the overnight rally as potentially being the failed follow-through to Monday’s capitulation. Tuesday’s pre-open dip had injected a bit of pessimism to keep alive the upside momentum. This morning’s pattern went the other way, injecting quite a bit of optimism.

Back under 2851.00 resumed the decline. This morning’s 2843.00 bias-up signal was broken when the bias environment came within view of lapsing. And now this afternoon’s 2829.50 bias-down target is exceeded to renew the bias-down signal.

Extending down further isn’t required, but this afternoon’s 2835.50 bias-down signal could contain a bounce. In fact, it’s trying to do that right now, after bouncing to 2838.00. Probing above 2835.50 during the bias-down environment would be a bias-down rally. Like no-bias trending, it would be doomed to failure, and require being retraced to the 2835.50 bias-down signal and possibly the 2827.00 10:15 print.

Meanwhile, a bounce back to the 2848.00 may be underway. Its test is likely at least to attack 2850.00. Regardless, today’s close either above or below yesterday afternoon’s 2837.00-2843.50 range would be predictive of the next major leg.

Hovering above yesterday’s highs.

Moments after sending my last blog update, a surge to fresh session highs attacked 2845.00. Fresh highs were expected, even if done as no-bias trending, which would be doomed to failure. That would require at least retesting the morning’s 2839.25 bias-up signal as support, if not also the 2837.50 10:15 print.

Both were tested before noon. And they’ve held since then.

Relatively narrow choppy sideways ranging supported by 2837.50 has persisted into and out of the noon hour. Neither afternoon bias signal was touched before triggering no-bias. Back above 2840.50 could extend to fresh session highs at 2847-2848. Back under 2837.00 could launch another downleg — although first neutralizing overbought RSIs at the high would be helpful.

Another bias-up target met and held.

This morning’s 2822.50 high fulfilled the 2819.50 bias-up target. It eventually corrected down to 2817.25 as the bias environment was lapsing. Already recovering into noon was vulnerable to a series of headlines that began claiming a deal was reached to re-open government. The noon hour surged to 2800.00.

The next reaction down touched 2824.50. Bouncing back to this afternoon’s 2827.25 bias-up target held it instead of renewing the bias-up signal. Will it extend higher like this morning?

Probably not. Probably not, because usually not. Usually, holding a test of the afternoon bias target through the 1:20 bias timing window will define the bias environment’s upper-end. Usually, the bias environment will back-and-fill, sometimes even trending down. Usually, hovering at the target can exit the bias environment in another upleg.

None of which suggests being short into fresh highs during the bias environment. Rather than be premature, new highs could get further squeezed. Having said that, this last upleg does seem to be the product of only the headlines, and its buying pressure is met. Back under 2823.75 would start to signal momentum reversing down.