Pre-close View

Surge to fresh highs suddenly collapses.

A noN-bias environment usually sucks volatility out of the market, and this afternoon’s was little different.  Still testing the 2048.75 bias-up signal at 1:20 and at 1:30 didn’t resume rallying until the bias environment was within view of lapsing. That produced a 9-point surge to 2058.00.

Then things got weird.

Despite violating the pullback limit by dipping to 2054.25, the surge resumed almost immediately and probed a fresh high. No accumulative pattern had formed in the interim, so that was weak-handed and vulnerable to failure.

No kidding.

The failure has extended down considerably, attacking 2043.00. That might have found support, and back above 2047.00 could launch a recovery targeting a close above 2052.00. There is otherwise room back down to 2041.00, or else 2039.00.

Ranging sideways at the lows.

Since testing and retest 2035.00 — to within 3 ticks, and then by 3 ticks — a bounce had room up to 2048.00 just as noise. Eventually only 2046.00 was touched, and only momentarily.

Perhaps stopping pessimistically short of its potential is the most bullish observation about today’s decline. From a contarian perspective, that reflects caution among buyers. There wasn’t much of that at this morning’s 2079.75 high.

That contrarian view suggests more have already sold, and will be less able to apply downward pressure to the market. This doesn’t mean sellers are done. So long as 2048.00 isn’t recovered, a fresh low remains possible, targeting 2030.50. But it would be vulnerable to recovering.

Otherwise, extending under 2030.50 would next target 2027.00 and 2022.00.

Choppy, range bound action still underway.

This afternoon’s bias environment began with a false break down to 2057.25. The 2059.25 bias-down signal had been touched in time to invoke the grace period, but it was recovered in time to trigger
late no-bias.”

This afternoon’s bias environment also recovered up to 2069.50. The 2071.00 bias-up signal was never really threatened.

Now the bias environment has lapsed. Its 2059.25 bias-down signal was just touched. Every intraday downleg has been the consequence to a failed rally, and there’s no reason why this dip has any greater likelihood for extending down.

Today’s session has produced a lot of inflection points, and the inflection points have been very productive initially. But trending opportunities have been absent.

Consolidating the morning slide. Still.

The morning’s slide to 2065.00 fulfilled the correction’s objective. The noon hour was allowed time for consolidating before trying to recover. The afternoon bias environment was allowed that time, too. And apparently also the balance of the day.

The rally hasn’t yet resumed, but the assumption continues to be that it will resume. Monday morning’s correction of Friday afternoon’s rally is done, and there was no requirement to resume rallying today.

But without yet trending again today, Tuesday’s open should gap open to trend during the morning. Trending in either direction without gapping would be suspicious.

Probing fresh highs into the final hour.

Sound familiar? The 2082.00 bias-up target had been exceeded to renew the bias-up signal, but its 2088.00 renewed bias-up target held its test.That could describe this morning’s open.

Differing from this morning was the afternoon bias environment. Rather than extend higher anyway, it has ranged sideways between 2083.50-2088.50.

But now the bias environment is lapsing. And it’s lapsing at or above all prior timing window highs. That’s bullish, and usually resumes trending. Especially on Fridays, whose final hour is extremely vulnerably to squeezes.

Already, fresh highs are being probed up to 2091.25. And there’s room up to 2098.00. Probing fresh highs through the 3:10-3:20 timing window would make 2098.00 even likelier. This much potential reward makes it compelling to be exposed to the potential for being whipsawed back under 2087.75.