Mid-day Update

Nothing.

This morning’s bias environment began lapsing at 11:30. It came within view of lapsing 10-15 minutes earlier. And only several minutes prior to that, another blip-down probed a fresh session low 5 ticks under 2579.00‘s prior low.

Then it was right back up into the range, testing 2582.25 resistance. Through the noon hour. And now into the afternoon bias environment.

Nothing about this persistent ranging indicates that sellers are marginalized. Or that buyers have a pulse. WedEX’s influence is now relevant. It doesn’t require trending, and doesn’t prevent a downdraft. But a downdraft would be likely to recover back above its origin. And there’s potential to drift, firm, or rally into the close.

Detour powered by fumes.

Anticipation for today’s tax reform vote in the House (which just began). Reaction to five consecutive gaps down that held tests of 2563.75 support. Overkill and extension of a corrective bounce. A combination of these, and more. Whatever the catalyst to today’s rally, it has been productive.

And it has neutralized a lot of upside attractions. Gaps back up to Tuesday and Monday’s closes. Ineffectual pessimism and upside traction that had suggested the week’s decline would at least be corrected. And now the closest thing to an upside requirement — the gap back to last Wednesday’s 2590.50 close — is in-play as this afternoon’s bias-up target.

Meanwhile, resistance at 2588.00 is being influential. Earlier, resistance at 2584.25 was influential, too. Its 3-point pullback resolved up, but there’s no assurance now of a shallow pullback or its recovery. And the current pullback just exceeded 2 points.

There has yet to be a fresh high since signaling bias-up. It’s too late to reject the signal, until exiting the bias environment at 2:30 under its 2579.25 bias-down signal. Reversing down prematurely would be entirely credible for extending down anyway, and without limitation. Otherwise, there remains potential to new highs.

Morning’s recovery on pause.

Not only was the 10-11 point post-open drop under 2566.00 retraced, but it was exceeded to touch 2571.50. That’s the morning’s bias-down signal, which was required to define the window’s upper-end, and did. Its 2566.00 bias-down target could have held, too, but it was tested as support into the noon hour.

2566.00 is being retested now into the afternoon bias environment. This afternoon’s 2565.25 bias-down signal was barely attacked, and not triggered.

It’s difficult to take too seriously any recovery attempt that hasn’t yet exceeded 2574.00 through a relevant timing window. Resuming the rally this afternoon would have no difficulty exceeding 2574.00. Breaking lower during the bias environment or coming out of it would be difficult to reverse up — let alone, to reverse up sufficiently — into the close. Possible, but difficult.

Holding support and recovering resistance are two very different things.

CORRECTION: This morning I inadvertently referred to yesterday afternoon’s bias parameters in the Market Tour and Post-open Review. The cause for that has been corrected. Sorry for the confusion!

The test of 2566.75-2568.50 was aggressive, thorough, and brief. And it was almost rejected. It was also almost not rejected. Still overlapping 2570.00 at both 10:15 and 10:30 neither held it nor rejected it. That’s okay — a higher signal can trigger by proxy.

Extending sharply higher after 10:30 tested 2578.00. Being this morning’s bias-down signal, during a bias-down environment, 2578.00 defined the window’s upper-end. Recovering it into the noon hour would have confirmed by proxy that 2570.00 had held recovered earlier. But 2578.00 was being attacked at noon. That’s okay —  another signal can trigger a recovery.

2578.00 also defined the noon hour’s upper-end. That could have caused the noon hour’s exit to tumble and attack 2570.00. But it was likely a knee-jerk reaction to headlines of a bomb threat in Paris. Anyway, the afternoon’s 2573.25 bias-down signal was tested at 1:20 and 1:30 to trigger noN-bias. That’s okay — but not for long.

Hopefully, the Paris threat will pass without incident. If so, then a recovery would have no excuse to further delay rallying back to yesterday’s 2586.00 high, if not also back to last week’s 2593.50 high and higher. Back above 2576.00 (now being tested) would start to signal a recovery underway. Back under 2572.25 would start to signal a bigger downleg underway. That’s okay — there’s a lot of buyers waiting at 2510.00.

Opening surge has yet to improve.

The open’s dip to 2566.75-2568.50 would have trapped shorts and refueled longs. Rallying straight up from there would have likely extended through the noon hour. But the open didn’t dip. And the pre-open dip held 2570.00. Too few shorts were trapped and longs weren’t terribly refueled.

Holding a test of this morning’s 2574.00 bias-down signal through 10:15 was still bullish. It put into play an offsetting test of the 2582.75 bias-up signal. And that happens to be the recovery’s high. Now having hovered shallowly through the noon hour, another break higher is likely.

At least, an attempt to break higher is likely. This afternoon is also a no-bias environment, and a test of its 2585.00 bias-up signal would likely hold. It could also push price back down. Otherwise, only breaking back under 2579.50 would be credible during the bias environment for launching a reversal of this morning’s rally.