Pre-close View

Much overlapped range trying to ignore the attraction below.

The noon hour had trended up already through the afternoon”s 1925.00 bias-up signal. The 1:20 bias timing window was overlapping the 1931.00 bias-up target, but not by enough to renew the signal. Price action since then has ranged choppily sideways.

Very choppily. And very sideways.

This cuisinart rotating around 1929.00-1936.00 includes reacting to the Beige Book release. Its effort to push price back over the cliff was rescued, if only by discovering the cliff”s shallow 1929.00 basin.

Now another dive off the cliff is underway, this time following fresh highs testing 1937.00. The 1929.00 basin is being probed down to 1926.00, but real cliff diving here should essentially slide through one or two air pockets back to 1925.00 and then lower.

Perhaps the ongoing bias environment delayed reversing down. Well, the bias environment is now lapsing. So, not dropping even more sharply soon would start becoming unlikely to drop at all.

Fresh low finally (albeit barely) probed.

One of the most important lessons learned by lifeguards is not to let drowning victims drag you under with them. I”m reminded of this while trading several attacks and probes of fresh lows that keep fighting back prematurely.

This afternoon”s renewed bias-down environment dipped eventually to 1913.25. This could have served to launch a recovery, and in fact it was recovered back up to this afternoon”s 1926.00 bias-down signal. But its resistance pushed back, and now another slightly lower fresh low is flailing about at 1912.75.

Trending down through 3:10-3:20 could have added a lot of confidence to riding a short through the close. So long as 1920.50 isn”t recovered, I”ll still give fresh lows a benefit of the doubt for testing not only 1911.00 but also 1907.00.

Bazooka shells on Monday?

Even before this morning”s price action had only ranged sideways, the likeliest afternoon scenario was to range sideways if a plunge wasn”t developing.

This morning”s price action did range sideways, and the afternoon has probed fresh post-open lows at 1971.50. But the open”s decline has not extended, so price action has begun ranging narrowly sideways.

If a plunge targeting 1938.00 or any downleg through the 1967.,25 overnight lows is happening today, then it should be obvious pretty soon. Getting too far into the position-squaring window after 3:37 could drop, but not from bearish sponsorship.

Don”t forget to join us in the chaRTroom at 4:03 ET for the post-market Wrap.

Minimum corrective bounce target met.

This afternoon”s 1986.00 bias-up target was already being tested at 1:20. It wasn”t exceeded to renew the bias-up signal. But it was still a bias-up environment… until 2:30 when the bias environment began lapsing. Or until coming within 10-15 minutes of that.

In fact, that”s when this afternoon”s 1976.00 bias-up signal started giving way as support. All the way down to 1944.00. That was actually a test of the 1949.00 target, and each bar there overlapped 1949.00, warning that sellers were losing momentum. Combine that with oversold RSIs, and suddenly 1979.00 is being tested as resistance.

Having tested one big corrective bounce target at 1986.00, any higher target would still put into play 1996.00 and 2000.00. Regardless, this remains only a temporary rally, prior not only to retesting the week”s lows, but probably also to resuming the aggressive decline.

Overnight rally disappeared, but still not totally replaced.

The pre-open surge in reaction to China”s rate cut has yet to be retested. Ranging 1930.00-1948.00 into the open broke a little lower down to 1922.00 during the morning”s bias environment. But only temporarily, as that was recovered to 1945.00 before the bias environment began lapsing.

Price action since then has trended down, and much more deeply. The afternoon”s 1921.00 bias-down signal wasn”t touched in time to trigger or to invoke the grace period. But a plunge broke it decisively by 1:30 to invalidate the no-bias signal. The 1911.00 bias-down target wasn”t actually put into play, but it held multiple tests at the low anyway.

And now the bias environment is lapsing. The overnight rally hasn”t extended, but the pullback isn”t deep enough to have rejected it, let alone to have reversed it down.

It”s not too late — the bias environment was exited under the noon hours low, and entering the final hour under the bias environment”s 1910.00 low would give sellers traction. That gets very unlikely if probing above 1920.00 before the final hour.