Mid-day Update

Gap up’s rejection holds.

Retracing the open’s 2448.25 gap up fell to 2440.50 as the morning’s bias environment began. Its reaction up tested 2445.00 and fell to 2438.00 during the noon hour. This afternoon’s 2439.00 bias-down signal held its test to trigger no-bias. And now a bounce is testing  2442.00.

The bounce could extend up to the 2444.00 area, and still be likely to resolve down. This morning’s “unfinished business below” at 2439.75 has been neutralized, so another rally leg can’t be dismissed — back above 2445.00 would start to signal something more substantial underway.

Otherwise, back under 2439.25 would all but ensure extending to fresh lows. And fresh lows at this point all but ensures testing 2427.25-2429.00.

Morning rally rejected.

Not yet extending the gap up during the opening 15 minutes wouldn’t prevent extending it anyway. It would only doom the extension to failure.

Which is what happened when gapping up to 2446.50 was only maintained, through 9:45, before surging to 2453.50. The bias environment lapsing at 11:30 was probing under the open’s print down to 2441.00.

Bouncing through the noon hour came within 1 tick of this afternoon’s 2447.75 bias-up signal. This is a no-bias environment. It has room down to the 2441.50 bias-down signal. Or, hovering at or just under the bias-up signal could still break higher later.

ECB’s Mario Draghi speaks at 3:00. He’s a reliable catalyst for injecting volatility into the market. Greeting his remarks from back under 2443.00-2444.25 would be likely to extend down into the weekend. Otherwise, a similarly favorable reaction would be likely from above 2448.50.

Wild morning ride tries retracing. Try again.

Similar to yesterday, bounces are still failing to prove they’re sponsored by strong hands.

This morning’s bounce back up to 2446.50 stopped short of an offsetting test of the 2448.50 bias-up signal. It was tested already at the open, so a retest wasn’t required. Falling back under 2443.00 started to signal a retest of the 2435.25 overnight lows was likelier.

In fact, the morning’s 2434.50 bias-down signal was touched. When the bias environment began lapsing. While RSIs were simultaneously oversold. Vulnerability to at least a corrective bounce was exploited, bouncing up to the morning’s 2440.00 bias-down signal.

Hovering there through the noon hour suddenly broke higher to 2444.25 coming out of the noon hour. It’s valid, and so is the afternoon’s 2443.00 bias-up signal that it triggered. But it hasn’t extended. And now its reaction down is testing the noon hour’s consolidation around 2440.00.

Back above 2443.50 would start to signal the recovery is resuming. This afternoon’s 2448.50 bias-up target is in-play, and its test is likely to be probed to 2451.50 and higher. But back under 2440.00 would onece again open the door to seeking buyers at yet lower levels, like 2429.00.

Gap down held, but recovery holding back.

The late push to fresh overnight lows at the 2440.75 bias-down target had to prove itself, or else fail. It failed. Back above 2442.25 quickly signaled the drop lacked sponsorship. But trending higher through the morning never proved there was sponsorship for a recovery.

Chipping away at the 2446.00 bias-down signal’s resistance wasn’t actually probed until the bias environment had begun lapsing. But then only to attack 2448.00 into the noon hour. And RSIs returning to their upper-end was repeatedly stopping short of becoming overbought. Strong hands weren’t buyers.

Dipping during the noon hour tested this afternoon’s 2443.00 bias-down signal — both at 1:20 and at 1:30. Bias-down avoided triggering, but it also avoided holding. This is a noN-bias environment, which often clings to the bias signal before breaking it anyway. Regardless of its timing, a break to fresh lows testing 2438.00 is possible, unless the bias environment were exited in rally mode attacking 2446.00.

Hovering at resistance.

This morning’s bias environment fulfilled the retest of Friday morning’s 2439.50 high. Actually, the open’s surge did that. The bias environment extended up to 2445.25. Rallying again at the bias environment’s 11:30 lapsing was bullish, and the noon hour extended up to 2448.50.

2448.50 is the afternoon bias-up signal. It didn’t trigger. But two reactions down were recovered entirely. Often, that resolves up anyway when the bias environment begins lapsing — whether or not durably.

This morning’s doubly-renewed bias-up target was 2446.00. So long as it holds pullbacks during the bias environment, at least an obligatory fresh high is likely. And it would likely touch 2450.75, regardless of its resolution from there. Back under 2445.00 would instead start signaling momentum already reversing down.