Pre-close View

Today’s market Wrap will begin at 3:33 PM ET.

Bouncing into the bias environment exit couldn’t make it back above the open’s 2141.50 lows. Not for lack of trying, with multiple tests through 2:00-2:30 when the bias environment began lapsing.

So, not for lack of trying, But if the bias environment wasn’t rallying — budding into a short-squeeze – then sellers were not fully absorbed. That essentially marginalizes buyers for the day.

Back under 2138.00 resumes the decline, especially if confirmed by fresh session lows through 3:10-3:20, potentially confirming the decline’s momentum through Wednesday morning.

Not reversing the session’s slide.

The afternoon’s 2156.00 low was recovered back up to the 2161.25 bias-down signal. Its resistance didn’t have to prevent extending the recovery. But the timing windows didn’t help.

Having trended down into the afternoon, exiting the bias environment back above a prior high could have triggered a short-squeeze. But the prior high wasn’t touched until after entering the final hour, still under 2161.25.

The recovery is firming anyway, probing the open’s 2161.75 low and attacking the noon hour’s 2163.75 prior high. But the timing has made this recovery suspicious, so reversing down remains a possibility.

SPECIAL PROGRAMMING NOTE: There is no Saturday Review this weekend. Today’s post-close Market Wrap will be expanded to include a Bigger Picture discussion and stock requests.

Bias-up dip seems ominous.

This afternoon’s 2169.25 bias-up signal triggered cleanly at 1:20. Despite not yet having extended above its pre-1:20 2172.75 high, the bias-up signal was maintained through 1:30. So, rejecting its 2175.50 target would require exiting the bias environment at 2:30 back under its 2163.50 bias-down signal.

None of which prevented a 6-1/2 point plunge, which extended down to attack 2163.50 to within 3 ticks. That was within minutes of 2:30. And it still held. So, not for lack of trying to reject it, but the 2175.50 bias-up target becomes “unfinished business above.” Its eventual test is required before a durable decline would be credible.

In fact, the plunge has been retraced entirely to retest 2171.00. That’s still not a fresh session high, let alone the 2175.50 bias-up target. But it helps to confirm the plunge’s bias-up context.

The only question is whether the plunge refueled buyers (i.e. trapped shorts in order to squeeze them) to extend the rally, or if the bias-up plunge is warning that the rally is waning. How about a little of each.

Back under 2167.00 can trigger another downdraft, plunge-like or not. But reacting down after testing the  2175.50 bias-up target can produce a durable downleg. Which the bias-up plunge suggests.

FOMC reaction recovers back to prior highs.

The FOMC elected not to raise rates. Shocker. The intraday corrective drop from the open’s anchor had cleared out selling pressure.

The news was greeted at 2136.00. A blip down held 2133.00 and reversed up as sharply to 2142.00. That extended up to 2146.25 before finally correcting ahead of Yellen’s press conference. She can still threaten, even though the Fed can’t actually bite. So price corrected back down to 2135.25.

Another upleg began with the conference’s start. Having stopped pessimistically short of neutralizing Monday’s overbought RSIs at 2146.75, the area offered little resistance on its retest. Its retest was rewarded by extending higher to last Monday’s highs, which are now being tested up to 2152.25.

Is that it? Possibly. Last Monday’s higher prior lows, the gap back to its close, a 61.8% retracement of the structure containing it… all have been tested at 2152.25. Until actually exceeding the room for noise above it at 2153.00, the market is vulnerable to reversing down. Sharply.

Afternoon bounce is far from optimal.

Having triggered noN-bias at 1:30, the bias signals weren’t required to define the bias environment’s range. But they did. The 2133.75 bias-down signal held as support, and price gravitated up. Up, and away from this morning’s 2128.25 bias-down signal, whose test has become “unfinished business below.”

But that’s not necessarily bullish.

Recovering the 2137.50 prior high at 2:30 with the bias environment lapsing would have been bullish. But it was still being tested then. Price firmed further, and entering the final hour at 3:00 above the 2139.25 prior high would have been bullish. But it was only being attacked to within 1 point. Recovering the 2140.00 prior high through the 3:10-3:20 proxy window…

Anyway, you get the picture. A lot of buying pressure has been expended without gaining any traction for the effort. But the rubber band has been stretched. And yesterday’s high is holding as resistance.

None of which is a sell signal.

But breaking back under 2135.75 (being tested now) could trend back down aggressively into the close. The market may be vulnerable to extending higher, but there is no requirement other than to probe fresh lows.