Pre-close View

But it’s arrived. So far, in the least possible way.

This morning’s bias-down threatened to invert the bullish WedEX. A last ditch effort was made to avoid that, but it failed. Bearish WedEX, it is.

Immediately, the bias environment’s lapsing produced new session lows at 2001.50. The afternoon’s late bias-down environment was retraced up to 2014.50 at the last possible moment, but ultimately lapsed back at its 2008.00 bias-down signal.

Remember, the bearish WedEX is responsible Friday afternoon only for causing bounces to fail. That means retracing deeper than 61.8%. That happens to be 2007.00, which is being tested now.

In fact, 2007.00 is being overlapped considerably. Congestion could break either way, but usually only temporarily. So, a late bounce should still fail. If so, then WedEX won’t be invalidated. And Monday morning would be likelier to trend down aggressively (from its opening print).

Big blip-down meets huge surge, and follow-through.

The open’s setups were fairly predictable, if not predicted before yesterday’s close. Testing 2052.00 early would find trending unlikely with the afternoon’s FOMC”s looming. The balance of the open trended back down to 2037.50.

Also expected was the lack of action ahead of FOMC. A last-minute break higher to 2048.00 was labeled as weak-handed, and the knee-jerk reaction to FOMC spiked down to 2031.00.

And spiked back up.

Having maintained the gap up above yesterday’s highs, FOMC was being greeted from a position of strength. The path to fresh highs wasn’t known, only its resolution. Room for noise above 2052.00 was touched at 2055.50. A drop to 2040.00 trapped a sell signal before reversing up to 2062.75 as Yellen’s Q&A got underway. Now fresh highs are testing 2064.00.

Assuming that no sudden selling were to emerge before the close, this action will not trigger a bearish WedEX. Closing above 2063.00 would trigger a bullish WedEX, so long as Thursday’s open doesn’t gap under 2052.00. None of which influences Thursday, or Friday morning. But it does suggest trending higher into and out of the weekend.

Today’s post-market Wrap will begin at 3:40 ET, before the close.

Choppy ranging persisted through the afternoon bias environment as was expected, presumably from inhibition ahead of tomorrow’s FOMC policy statement. Perhaps a little too optimistically, as its reaction down from 2046.75 only reached 2036.75, ignoring its potential to 2034.25.

Turnabout is fair play. Bouncing back into the range has stopped has been resisted by the afternoon’s 2044.00 bias-up target, which is pessimistically short of the noon hour highs. Now the bias environment is lapsing, so the rally is vulnerable to resuming.

Breaking beyond either 2040.00 or 2046.00 would likely trend another 6 points in that direction, to 2034.00 with room for noise down to 2032.00-2033.00, or to 2052.00 with room for noise up to 2055.50. Beware of false breaks during the FOMC policy statement inhibition.

Drop recovered, but not reversed.

A lot of energy went into this morning’s sell-off. It had held 2011.00 before reversing down 28 points to test the lowest calculable objective at 1983.50 into the noon hour. The noon hour’s bounce retraced almost all of it to attack 2010.00.

There has been no improvement since then. And not much deterioration.

The afternoon bias environment was likely to range sideways choppily, and it did. Because it did, there’s no new pattern requiring new trending, or retracing any deeper.

The stability may seem like strength. But stability is only delay. Leveraging the stability to close above a relevant prior high would reflect strength. That relevant prior high continues to be from Friday afternoon at 2015.25. And it continues to hold.

Unless another rally were to begin momentarily, no hold-long will be considered, and there is still vulnerability to drifting down into the close.

Late break lower about to meet position-squaring.

Firming from the noon hour’s exit had bounced 11 points to attack 2015.00. The bias environment exit was a little lower, back at the afternoon’s 2009.50 bias-down signal. That’s where the noon hour was entered, too.

It was similar in principle to this morning’s ranging. That was certainly wider, but it also rejected the support test by delaying a recovery. The bias environment exit delayed recovery from testing 2009.50. And it also produced a new downleg.

Now that setup’s 2000.25 target has been met and probed down to 1998.50. A reaction up to 2005.00 is trying to extend even 1 tick higher to confirm its return underway to 2009.50.

That’s taking awhile, and fresh lows can’t be dismissed, if only to retest the low’s oversold RSIs. And possibly to slide more sharply into the weekend.