Mid-day Update

Dry cleaners morning not letting go.

Post-open action bounced around 2473.00-2475.75 before exiting the bias environment. Probing higher into the noon hour and out of it has extended up to 2477.00. Barely above the morning’s range, and still 2 ticks under the overnight highs.

Restrained optimism? Coiling? Probing fresh highs should be sudden, steep and substantial — almost literally exploding higher. Anything more timid would be suspicious.

Regardless, this afternoon is a no-bias environment again. Back under 2474.00 would now start to signal a probe into negative territory, whether or not brief or temporary.

Still trying to bring sellers out of the woodwork.

The open’s 5-point dip attacked 2468.00 before RSIs diverged positively. Its reaction retraced the opening dip at the bias environment’s high. Then the retracement was retraced at the noon hour’s low.

Back-and-forth, barely attacking positive territory. The market is trying to attract sellers to drive price down, probably where buyers are more willing to sponsor a bigger rally.

If that’s the goal, then a shallow dip won’t suffice. And so far, the technique has produced only a shallow dip, momentarily piercing 2468.00. It found obligatory support at the 2467.75 overnight low. There’s still potential to 2466.50, while back above 2472.00 would signal a probe above yesterday’s highs already underway.

Morning’s deep drop consolidating.

Breaking under this morning’s 2468.75 bias-down signal between 10:15-10:30 managed to invalidate the no-bias signal that had been triggered. Extending down to 2363.50 was recovered to probe 1 point above 2468.75 before noon. But reacting down 4 points has settled in for an afternoon no-bias environment.

Exiting the bias environment back under 2465.00 would likely resume the decline and probably at least test 2458.50. Almost any lower than that — or just closing under 2362.75 — would complete the Head & Shoulders topping pattern we’ve been traction.

Otherwise, rallying this afternoon could help to invalidate the Head & Shoulders in favor of fresh highs. Only closing positive today would be bullish, but the groundwork could be laid.

Fighting the downdraft.

This morning’s failed gap didn’t resolve very differently from yesterday’s. Post-open action collapsed, immediately instead of being delayed. And the bias environment contains the low, albeit a half-hour later. But these distinctions are not differences. So, the second consecutive failed gap should still deviate its course from yesterday’s path.

Which probably means either recovering to rally through the afternoon, or else resuming the decline. The latter is likelier since this morning left “unfinished business below” at 2465.00. There’s one bullish element: This session has traded almost exclusively in positive territory. Still, this afternoon has triggered no-bias, so rallying won’t be credible until breaking above its 2476.50 bias-up signal through 2:30.

Meanwhile, back under 2472.00 and 2469.00 would signal the post-open decline had resumed. And the timing at this stage of the pattern would be difficult to prevent fresh session lows from extending.

Holding up, but not extending.

This morning’s gap up at the 2473.75 bias-up signal wasn’t extended. Its collapse triggered no-bias, putting into play an offsetting test of the 2465.50 bias-down signal. It was pierced by an errant tick at the morning’s low.

Rallying from there through the noon hour touched this afternoon’s 2471.75 bias-up signal. It held, triggering another no-bias environment. Being the afternoon, an offsetting test of the 2366.25 bias-down signal is not required. But it would be the likely objective of a downdraft.

Meanwhile, the bias-up signal should define the afternoon bias window’s upper-end. Probing it later would be free to resume the overnight rally, and extend to new highs — all but invalidating the Head & Shoulders pattern.

Otherwise, dipping back to the morning’s lows could break lower into the close. The Head & Shoulders pattern would be very much in-play, still awaiting more confirmation at lower levels.