Mid-day Update

Noon hour prints fresh post-open highs.

WedEX’s bearish influence was essentially limited to probing a new trend low, and to the morning’s range being exclusively negative territory. But the bias environment itself was a rally that attacked the open’s 2428.25 high. Regardless, its influence is done.

Potential for being attracted back up to the opening range was fulfilled by a 10-point bounce off the 2415.75 low. The 2414.25 bias-down target became “unfinished business below.” Bouncing higher into the noon hour tested this afternoon’s 2429.00 bias-up signal by 2 ticks. But the noon hour exit had dipped to 2525.25.

This afternoon’s no-bias environment need not resolve either way today, and it will be vulnerable to resolving either way. Back above 2429.00 would have potential for retesting Friday morning’s 2439.50 high. Otherwise, probing back under Friday’s 2424.50 cash session close and resuming the decline could extend into Wednesday morning.

Noon hour probes fresh highs. Any buyers left?

It’s now Friday afternoon. The bearish WedEX influence should be obvious during this window. Either by price dropping, or by a test of resistance being retraced.

The bounce off this morning’s lows injected a lot of optimism. Drifting lower to deflate it, simply as noise, would still be a downward bias. But it wouldn’t be the bearish influence that the signal suggests.

The open’s 2419.50 low was attacked to within 1 point as the bias environment lapsing came within view. That coincided with rumors of Trump firing Bannon, triggering a rally up to 2431.50 into the actual bias environment lapse at 11:30. The news was confirmed and the rally extended into the noon hour up to 2435.50. That’s bullish. Indeed, the noon hour probed higher to 2439.50.

But this afternoon’s 2434.50 bias-up signal didn’t trigger. And the afternoon’s bearish WedEX is now influential. The reaction down from session highs is testing 2430.00. Back above 2436.50 would start to signal momentum reversing up, and leave only one bearish opportunity to react down from retesting the noon hour’s 2439.50 high. The trend is otherwise down.

Now retesting Friday’s range.

The open’s drop to 2449.75 had been recovered to test the 2457.50 maximum corrective bounce limit. It was still being tested as this morning’s 11:30 bias environment exit came within view 10-15 minutes prior. And then it was being tested no longer.

That preliminary window trended down into 11:30, and then trended down more. Strong-handed reinforcements were arriving, helping us to anticipate trending down further still. The noon hour’s entry had probed fresh lows, and the noon hour slid through more of them down to 2440.75.

Now the afternoon’s 2449.50 bias-down signal has been renewed by not recovering its 2444.25 bias-down target through 1:20. The renewed bias-down targets are 2440.75 and 2437.50. I identified the first before it was met, and price action since then has ranged flat-to-higher.

A corrective bounce could test 2448.00. Exiting the bias environment above the 2449.50 bias-down signal could launch a short-squeeze into the proxy or position-squaring windows. But the gap back to Friday’s 2440.00 close will need to be filled, which would make 2437.50 likely to be tested, too. And there’s still Thursday night’s Globex lows.

Upside targets met, and held. And reversed.

The only template still working at the open was an intraday retest of 2471.00-2473.50, and its vulnerability to reversing into a new downleg. Even the 2468.50 bias-up signal joined in, targeting 2474.00.

2474.00 was met soon after noon. I reiterated in the chaRTroom my warning from this morning, that the corrective bounce from last week’s low may have completed. Satisfying buying pressure while 1-minute RSI diverged negatively didn’t help. But new sponsorship would be especially difficult to attract with FOMC Minutes just ahead.

Price had backed off already before (Trump) headlines triggered a drop. It extended down in time to test this afternoon’s 2467.50 bias-down signal. The signal held through 1:20 to avoid triggering.

Then 2467.50 was probed by nearly 2 points but was still overlapped at 1:30. Any lower would have invalidated the no-bias that had triggered at 1:20. Could there be a reaction up on FOMC? Perhaps. But probably no more than a correction, because ending its inhibiting role will be replaced by a new one as the headlines play out.

Hovering above the trend change signal.

Last Thursday’s trend change signal triggered by closing under 2459.00. That is the interim low between the rally’s last two highs. Closing above it yesterday threatened to invalidate the signal, which would be done by a second consecutive close above it.

Opportunities to reconfirm the trend change signal have been slipping by. Opening back under 2459.00, and entering or exiting the noon hour back under it, both have failed. But each window did attack 2459.00. Closing back under 2459.00 would still be valid, but would not allow any delay to extending down Wednesday.

Back under 2461.50 would at least target a test of 2459.00, but not necessarily close under it. Meanwhile, back above 2464.50 and 2467.00 would increasingly point higher.