Mid-day Update

Renewed bias-down target met.

Selling had resumed at noon and plunged through the 2461.50 afternoon bias-down signal to its 2455.50 bias-down target. And lower, through the afternoon’s 2448.00 renewed bias-down target to 2445.50. All before the bias timing window even triggered.

In fact, that was greeted by a 6-point bounce to 2451.50. Still renewing the bias-down signal, but holding a test of the renewed bias-down target.

That bounce didn’t extend, which another dip is now attempting. The initial dip’s reward would have been 2455.50. Now its potential could be much more substantial.

Back under 2448.00 would instead signal the decline is resuming. And resuming the decline at this stage would put into play 2432.00 and 2419.50. So, not only containing the decline but also reversing its momentum back up could be the last defense against a very bad week.

Attacking July’s pivotal high.

This morning’s 2477.25 bias-up target held its tests through 10:15 to avoid renewing the bias-up signal. Prematurely probing 1 point above it reacted back down to 2474.50 as the bias environment began lapsing. And then it recovered.

Fresh highs coming out of the noon hour have attacked 2480.00 to within 1 tick. That’s essentially July’s high, which is the high prior to August’s actual high — the “pivotal high.” And there’s usually no bearish reason to revisit the pivotal high after having probed its interim low. Meaning, August’s actual high would likely be retested, too.

First things, first. An afternoon downleg can’t be discounted. This afternoon’s bias-up did trigger and it does target fresh session highs. But nothing prevents a downdraft. Back under 2476.75 would start to signal the weekend will be greeted in decline. Otherwise, the near-term trend remains up, no matter how shallowly.

Opportunity to reverse down fails.

The gap up and its extension to 2469.50 had fulfilled the next higher 2469.00 objective. It also intersected with downtrending pivotal resistance off of July’s high. And it reacted down sharply — first, back to the open’s 2464.25 buy signal, and then to 2463.25.

That second, deeper dip was a second bite at a 2465.50 sell signal. It probed under the first test’s 2464.25 low. And it was recovered, entirely, back up through the noon hour to touch the morning’s 2469.50 high.

Sellers should be marginalized for the day, or at least until the final hour. Its proof would be in the rally should meanwhile extending higher. If buyers can’t exploit the opportunity, then the final hour would be that much more vulnerable to reversing down.

Already the afternoon’s no-bias signal triggered. Probing above its 2468.50 bias-up signal after 2:30 would go a long way to resuming the upside momentum. Otherwise, just hovering at the highs or briefly probing fresh highs would be vulnerable to collapsing into the close.

Morning’s buy signal still intact.

A reward for absorbing the overnight sellers was at least to retest the 2454.25 overnight high. Having probed above yesterday’s high, exiting the open under the overnight low would have reversed momentum down. But trying to reverse down, and failing, would deserve a reward.

The open only temporarily probed the 2445.25 overnight low by 2-1/2 points. And now the overnight high is being probed up to 2458.75.

That’s this afternoon’s bias-up target. Like this morning’s 2457.50 target that was never triggered, each is likely only temporary resistance. Just having recovered 2448.00 and 2454.00 has already put into play 2461.00. And then 2477.00 could be tested or attacked, too.

Simultaneously overbought 1-minute and 3-minute RSIs at the high require its retest if reversed down now. A reversal has room down to 2452.00 before beginning to signal the rally is done. Otherwise, resolving up would next target 2461.00.

I’LL BE AWAY FROM THE SCREENS FOR THE SESSION’S LAST HALF-HOUR, SO MARKET WRAP WILL BE A HALF-HOUR EARLY.

If you saw my comments in the chaRTroom at last night’s Globex open, then you already know the North Korea missile launch hijacked the narrative from an ongoing decline. Its strong-handed sponsorship prefers selling into strength. Which they knew would be coming after weak-handed sellers had finished their knee-jerk reaction to a headline.

So long as there was only one headline. Another missile or escalation would have sucked in more selling pressure.

So, opening at the decline’s 2427.25-2429.00 target was reversed up almost immediately, and mostly relentlessly. The 2433.50 bias-down target was recovered in time to avoid renewing the bias-down. Slightly premature probing above the 2439.00 bias-down signal was retraced, and then recovered to test the afternoon’s 2444.25 bias-up signal.

Yesterday’s 2434.50 area close was attacked and tested almost grudgingly. Almost pessimistically, which would be bullish from a contrarian perspective.

It’s too late to trigger bias-up, or to invalidate the afternoon’s no-bias. That won’t prevent no-bias trending above it before the bias environment begins lapsing. Remember: This is still weak-handed sponsorship, which is often excessive. Probing positive territory is likely, potentially to 2461.00 before strong handed sellers start seeing the strength they prefer selling into. Back under 2441.00 would start to signal that they aren’t waiting.