Mid-day Update

Morning surge is holding.

The open’s rally had peaked initially upon testing 2722.00. Its reaction down snapped back up into a 9-point surge to 2729.00. The portion that probed above the 2722.00 target was quickly retraced. And soon, so was the portion that probed above 2722.00.

2722.00 has since held. Its reaction up has stopped short of 2722.00. Twice. And now it’s being attacked again. There’s room up to 2727.75 without yet resuming the rally. Back under 2724.00 would start to signal another downleg underway.

There’s not timing to which way the 2722-2727 range resolves. But its resolution should extend in that direction. Resolving down and closing under 2703.00 could lead to a much deeper retracement of the recent rally. Extending higher would next target 2730.00 and 2733.00.

More new highs, briefer consolidations.

Already breaking higher during the noon hour to 2712.00, this afternoon’s 2709.00 bias-up signal has triggered. Its 2714.00 bias-up target is in-play. It’s too late to invalidate the signal at 1:30. So it could be invalidated only by avoiding a fresh high above 2712.00 and then exiting the bias environment at 2:30 back under the afternoon’s 2703.00 bias-down signal.

The noon hour’s breakout does risk being too optimistic ahead of the 2:00 FOMC Minutes. An initially favorable knee-jerk reaction could fulfill 2714.00 and then reverse down. Already fulfilling 2714.00 before the Minutes could react down more durably.

Actually closing above 2703.00 would put into play 2722.00-2727.00 regardless of today’s high. Overbought RSIs at the high printed during the noon hour, so no retest of the high is required. Not first fulfilling 2714.00 would leave unfinished business above, but not closing above 2703.00 would be more relevant.

We’ve switched back to the usual chaRTroom platform as Adobe assures us they’ve resolved their issues. CLICK HERE.

This morning’s bias-up signal was renewed by exceeding its 2687.50 bias-up target through 10:15. The renewed bias-up target at 2692.75 was met to within 3 ticks. Its retest formed a close-quarters Double Top while RSIs diverged negatively. Spiking down immediately to 2687.50 was recovered, almost entirely, to within 1 tick of the high.

Just for rejecting Friday’s late extension down as an anomaly, the renewed bias-up target should include a retest of Friday’s 2698.25 pre-open high. Its objective would be the 2700.00 area, if not also 2703.00. So, I’m keeping the sell signal somewhat removed from the range at 2687.75. Even then, a dip into the bias environment exit touched it.

Today is not a session-long rally setup. The pattern might behave that way for other reasons, but not reliably. And although rejecting Friday’s late collapse is bullish, a direct path higher isn’t assured.

Morning drop hovering narrowly at lows.

That’s what yesterday’s session did. The overnight rally had reacted down immediately. The balance of the session hovered narrowly at the lows. A little bit of chop, which was masked by continually returning to the lows.

Yesterday’s drop had bottomed in the first hour, while today’s took 90 minutes. Both ended at 2683.25, then fluctuated around 2684.25, despite the open having created unfinished business below. Yesterday’s surged in its final minutes, and today’s… ?

Similar sequential setups tend to resolve differently. Sellers aren’t marginalized today. The afternoon’s no-bias environment has room down to its 2682.25 bias-down signal, essentially. No-bias trending under the bias-down signal on a Friday afternoon would not be unique. Probing it after the bias environment lapses would not be no-bias trending.

Ranging narrowly at the morning’s low.

The open’s slide down to 2683.25 hasn’t extended. Not through the balance of the morning bias environment, or the noon hour, or this far into the afternoon bias environment.

But neither has the decline recovered, or even bounced meaningfully. Ranging about 1 point either way around the 2684.25 bounce limit has left the decline intact. And this morning’s offsetting test of its 2681.50 bias-down signal remains in-play.

This morning’s drop bottomed too far above yesterday’s low — also 2681.50 — to be considered optimism. But the narrow ranging is ineffectual, so bearishness from a contrarian perspective is credible.

Back above 2687.00 would start to signal momentum reversing up. But potential to fulfill unfinished business below continues to be likelier.