Mid-day Update

Still fluctuating in negative territory.

This morning’s bias-down bounce extended to 2426.00 before peaking, almost 4 points above the bias-down signal. Reversing down into and through the noon hour retested 2418.00 support, still off the morning’s 2416.75 low and its 2415.50 bias-down target.

the noon hour’s exit bounced 4 points into the afternoon bias environment’s entry. That’s 2422.25 again. But this afternoon’s bias-down signal is 2420.00. And it didn’t trigger. So, the market is stuck between several rocks above and several hard places below.

The most bearish scenario would remain proximate to the 2420.00 bias-down signal, then break lower when the bias environment begins lapsing. At least a retest of Friday’s 2412.50 low would be in-play, potentially down to 2496.00.

The most bullish scenario would ignore this afternoon’s 2420.00 bias-down signal, which should define the bias environment’s lower-end. Probing under it anyway would be “no-bias trending” that requires being recovered. Probing under it deeply enough to fulfill “unfinished business below” at this morning’s 2415.50 bias-down target would neutralize its attraction. The recovery requirement would do the rest.

An alternative bullish scenario would exit the bias environment rallying back above 2425.00 and higher. At least exit the bias environment above 2423.75, preferably above 2427.25. The recovery template loses that scenario if 2418.00 is retested as support.

Morning’s surge retraced, but not yet punished.

The open’s surge got a benefit of the doubt for extending higher because of Friday Factors. Otherwise, the opening 15 minutes of volatility had only retraced yesterday’s 2436.50 prior high, but had not yet exceeded it. The reward was new highs up to 2443.50.

The pattern since Wednesday afternoon has been to probe prior highs, and then to fail. This morning’s probe above prior highs has kept the pattern alive, as it has failed.

Overbought RSIs at the high weren’t retested before already slipping a little when the bias environment began lapsing. The noon hour retraced the entire post-open rally. Actually, half the noon hour retraced to within 2 ticks of the open’s gap up. Now after renewing the afternoon’s bias-down signal, yesterday’s 2430.25 cash session close is being probed down to 2428.00.

Reversing this morning’s rally would target 2419.25. Avoiding it would require trapping shorts. Now having probed negative territory, exiting the afternoon bias environment back in positive territory would suggest the session low is made.

Another fresh high. Another rejection.

Holding a test of this morning’s 2433.25 bias-up signal had put into play an offsetting test of its 2425.75 bias-down signal. That was fulfilled as the first hour was ending.

That’s also when the Comey hearing had elapsed beyond the point where any new revelation or refutation was going to emerge. And the market rallied straight up into the noon hour’s 2436.75 high.

The noon hour’s high was another probe above prior highs. But it hadn’t yet developed when the noon hour was entered, i.e. when the bias environment was lapsing. And the noon hour’s exit was still overlapping prior highs. The afternoon bias environment’s entry rejected the fresh high altogether.

This afternoon’s no-bias environment has bounced back up to its 2432.75 bias-up signal. Probing it when the bias environment begins lapsing would be credible for extending higher. Any earlier would be no-bias trending and likely to fail. And already starting another downleg by then remains possible.

Minimum downside objective met.

Trending down since this morning’s bias environment began has been very productive. Not only in avoiding a rally, as not gapping up suggested would be avoided. And not only in trending down. But now in testing the 2424.25 minimum likely objective below.

If that’s not today’s of, then the next lower objective would be 2421.50.

Lower lows can be avoided. The 2426.50 bias-down signal was not triggered. Its grace period was invoked, but a surge to 2429.50 avoided it. The no-bias environment could test 2433.00 before even threatening
“no-bias trending,” or rally through it after the bias environment begins lapsing.

Otherwise, fresh lows could still extend down deeper. Although the b2426.50 minimum could serve as the low, the likely objective would be 2421.50. Exiting the bias environment above a prior high could otherwise be unstopable.

Consolidating at unchanged.

The post-open bounce stopped 4 ticks short of fulfilling its offsetting test of the 2440.00 bias-up signal. That was before even triggering no-bias. And it was 2 points above Friday’s close… briefly.

The balance of the bias environment drifted back down to 2434.75. Surging into the noon hour momentarily pierced unchanged above 2437.50. But that is a very suspicious window to express sentiment, and it has not extended. In more than an hour since then.

The noon hour’s exit pierced above 2437.50 again. Despite not rejecting unchanged, another relevant window has avoided probing higher. The vulnerability to launching into a downleg is increasing significantly. This morning’s unfinished business above at 2440.00 may be inhibiting that. A fresh high that reverses back down would be bearish.