Pre-close View

Columbus Day hasn’t discovered new sponsorship.

Rallying overnight and gapping up to the renewed bias-up target may have scared away new sponsorship. It certainly hasn’t attracted any. Neither buyers, nor sellers, as the reaction down held the afternoon’s bias-down signal in a no-bias environment. And the range has only narrowed since the bias environment started lapsing.

And there’s no sign of that changing today. There’s certainly no such requirement.

Hovering at or just above last week’s highs into the close won’t produce a decisive break higher — not like the open’s gap up had suggested. And that wouldn’t confirm what the open’s gap up had suggested.

But a target was just met at the afternoon’s 2156.50 low, and the position-squaring window has opened. Surging through 2158.75 would be credible for extending higher into the close.

Sellers gained traction.

Retesting last week’s lows down to only the 2138.00-2139.00 area could have sufficed to define weak-handed sponsorship, still vulnerable to a big short-squeeze. Now a short-squeeze has become less likely, and not simply because the retest extended down to 2136.00.

It’s when the lows developed, which indicated that sellers gained traction for their efforts.

The bias environment was exited at 2:30 under the noon hour’s low, and the final hour was entered at 3:00 under the bias environment’s low. Regardless of almost any pre-close price action, tomorrow morning is now likely to trend down deeper. Not probe, not fluctuate, but trend.

Gapping up could reject or invert sellers’ traction, and become as bullish as the setup would have been bearish. Bouncing right now ahead of the 3:37-3:52 position-squaring window is likely to fail and probe fresh session lows. A short-squeeze instead would have to retrace the entire afternoon drop to be relevant.

Hovering at the lows without breaking lower.

Trending wasn’t likely today due to the Jewish holiday limiting the day’s volume and sponsorship. So, testing a relevant support below isn’t remarkable. Its test isn’t required to react up, let alone to be replaced by a bounce. But that was tried anyway.

And it’s not exactly succeeding. More optimism would enable a bigger bounce. So, pessimism is  winning out. And that pessimism is potentially bullish from a contrarian perspective.

Breaking lower would be unlikely to do more than retest the noon hour’s 2146.75 lows. But breaking higher has room up to unchanged at 2160.00 before becoming trending. Again, though, there’s no requirement to trend at all, or even a likelihood before Tuesday.

Afternoon rally to fresh highs.

I noted this morning that sellers had dumped a lot of ballast during the 10-point drop, without gaining any traction for the effort. Now having rallied 19 points off the low, the question is whether those buyers are rewarded enough for now to allow another pullback.

The afternoon’s no-bias environment did rally up to its 2152.00 bias-up signal. Its test was likely to include 2153.00, which was probed by 3 ticks. Trending higher remained the likely resolution, which was launched after a pullback to 2151.50.

The launch came 5 minutes before coming within 10-15 minutes of the 2:30 bias environment exit. It wasn’t optimal, but it was allowable, given that it wasn’t organic but triggered by a headline. Anyway, the open’s anchor was recovered on the way up to 2163.25.

That’s a 61.8% retracement of Friday’s range, natural resistance. Holding above 2159.50 would keep alive the upside momentum. And the next higher objectives are 2169.00 and then 2175.50. The alternative is not to reverse the trend down, but another pullback would become likely under 2158.00.

Noon hour’s fresh highs not rejected. Or extended.

The open’s recovery to 2148.00 was corrected by 61.8% down to 2138.50, all during the morning’s bias environment. The noon hour was greeted back at 2148.00, and soon surged to fresh highs attacking 2153.00.

The 2149.00 bias-up signal triggered. Eked higher to touch 2154.00 after 1:20, which confirms the 2155.00 bias-up target is valid. Price fluctuating narrowly since then doesn’t affect the bias-up target’s requirement to be met.

But it might delay it.

The 3:10-3:20 proxy window just closed, and still no new upleg. Back under 2149.75 — being touched now — would trigger a dipper pullback this afternoon, but still be likely to resume the rally.

At least, more likely to resume the rally, than not.

Optimal for the recovery would have been to close yesterday back above 2143.50. Sub-optimal would have been to gap up this morning above 2149.00. Closing today above 2155.00-2156.00 would be preferable, too. Especially compared to closing back under 2149.00, which would suggest today’s bounce was only temporary, and not the pullback from Thursday’s high.