Mid-day Update

Good news triggers morning rally.

This morning’s 2537.00 bias-up signal triggered while its 2541.50 bias-up target was being attacked, and attacked, and attacked. A slightly higher high actually tested the target. Narrow ranging continued overlapping it until the bias environment began lapsing.

And then the rally extended. The suddenly steep slope suggests that’s where the rally actually began. Like yesterday, the bias environment lapsing trended straight up into the noon hour’s 2549.25 high. Unlike yesterday, there was actual news associated (House passes budget, inches closer to tax reform, surprising the recent gloomy opinion spin).

The balance of the noon hour and now this much of the afternoon bias environment have hovered at or under the 2549.25 high. Meanwhile, this afternoon’s 2547.00 bias-up signal has triggered.

Having expended so much buying pressure so quickly, the balance of the afternoon is vulnerable to backing-and-filling. Having created so much extra upside, pullbacks have room down to 2543.00 before threatening the chart pattern. But probing a fresh high — especially fulfilling this afternoon’s 2452.00 bias-up target — could trigger a pullback if not already done.

Reacting down from noon hour high.

The open did not extend higher. Which wasn’t surprising since yesterday’s rally was stretched by weak-handed sponsorship. But a mini-plunge to 2529.00 didn’t extend down, despite the vulnerability.

The morning’s 2532.75 bias-up signal was recovered, and then probed when the bias environment came within view of lapsing. That extended higher into the 2538.00 noon hour high. Overbought RSIs at the high — if 1-minute RSI can even be considered overbought there — don’t require a retest since that was during the noon hour.

The afternoon 2536.50 bias-up signal was tested, but it failed to trigger. An offsetting test of the 2531.00 bias-down signal isn’t required. But reacting down into the bias environment is testing 2533.00.

If this dip isn’t absorbed, then it should at least probe negative territory under 2532.00. Closing in negative territory would be likely. Closing under the morning’s 2529.00 low would even form a bearish Pivot Reversal. Otherwise, back above 2536.00 would all but ensure extending to 2541.50.

Narrow range persists.

Germany and China are both closed today. They’re also both asleep now. Or close to it. But this morning’s narrow ranging persists. The lack of volatility hasn’t attracted new sponsorship, so the market continues hovering at or under the 2529.50 overnight high.

The overnight high is a “new Globex trend extreme” that required intraday retest. Now the attraction above is neutralized. RSIs aren’t overbought, so there’s no other “unfinished business above.” Dropping from this pattern tends to begin suddenly.

Retracing ground is a lot easier than forging through untouched territory. Breaking higher would still be credible for extending since counter-trend sponsorship is no easier to attract. But the greater vulnerability is back down — this morning’s 2520.25 is “unfinished business below,” as is Monday morning’s 2509.50.

Firmed during the noon hour.

This morning’s reaction down from attacking 2526.00 got to 2519.25 likely corrective pullback objective. It was being pierced by 1 tick at noon. Reversing back up through the entire noon hour reached 2524.00. The bounce held its ground into the 1:20 bias timing window.

The afternoon’s 2525.25 bias-up signal was barely attacked to within 1 point. This being a no-bias environment, the next hour may only range choppily sideways, or dip back down to the 2517.00 bias-down signal. Retesting this morning’s overbought RSIs at 2525.75 during the no-bias environment could prove too optimistic to be maintained. Especially as sponsorship starts dwindling and Tuesday news events start coming into view.

There’s still a template that would track ending the day in negative territory. But not exiting the noon hour in negative territory has left more paths back to the high, than lower.

New highs through two timing windows.

Remember that narrow 2-point overnight range? This morning was something else entirely. and that post-open 4-1/2 point dip? Retraced entirely, and pales in comparison to the 11-point rally that its recovery became.

All this morning. Probing new highs — and not by a little, thanks to starting the rally early. All within expectations. Also within expectations? Vulnerability to an afternn if this afternoon does reverse down, this morning’s rally is too steep of a trajectory to contain the ultimate high.

But noN-bias just triggered, so there is no higher target in-play. And this morning’s rally above its 2509.50 bias-up signal originated too late to trigger. It is “no-bias trending” that requires being retraced, often also to its 10:15 print which was 2508.00.

This being a Friday, not already reversing down as the bias environment lapses would instead be vulnerable to extending higher into the close. A meaningful portion of market participants is about to start leaving early for the Yom Kippur holiday, and thinner volume can have volatile effects at these heights.