Pre-close View

Unfinished business above at this afternoon”s 2128.25 bias-up target. Invalidating it became difficult after probing above its pre-1:20 high. Now invalidating it is almost impossible, having exited the bias environment at a fresh session extreme, attacking 2126.00.

The rally isn”t precluded from retracing. Having entrenched the upside attraction, the pattern becomes vulnerable to a corrective dip, and has reacted down to 2124.00. But exiting the bias environment at a new session extreme is rarely reversed during the next timing window.

More so, the rally can gain traction that helps to ensure trending higher tomorrow morning. Exiting the bias environment above the noon hour”s high is half of the traction signal. The other half is to enter the final hour above the bias environment”s 2125.50 high, or to probe new highs through the 3:10-3:20 timing window.

Entering the final hour back under the 2120.75 prior low could still invalidate the upward moment. But even that would be suspicious. Otherwise, the rally”s minimum 2136.25 target is only getting closer.

Retesting the post-open high.

The opening 15 minutes” downtrend may have been correct to reflect a lack of buyers. But not probing a relevant support also correctly reflected that sellers were lacking, too.

And not extending down left an environment that could respond to the bullish WedEX. So, the a 4-piont surge greeted the bias environment starting to lapse.

This being expiration, trending through the close is likely, if trending is already underway. Trending up can more difficult than down, but less so when so many opportunities to trend down have not extended.

Bias environment exit is probing fresh highs.

This afternoon”s no-bias environment was essentially a no-volatility environment, too, barely piercing above the 2113.00-2115.00 2-point range.

A 2-point spike up coincided at 2:30 when the bias environment began lapsing. That has eked out slightly higher and higher highs up to 2117.25, but its reactions down continue overlapping the noon hour”s 2116.00-2116.50 highs.

That”s the definition of flat-to-higher. And it threatens to fulfill the third higher close required by Monday”s confirmed breakout.

So, closing positive today would open the door to a flat-to-lower morning tomorrow. Nothing too dramatic, as the window for a correction essentially closed Thursday morning. And the door remains open to simply extending the rally Friday morning, instead of waiting for the afternoon”s bullish WedEX influence.

There”s always a path down. Friday”s path down would invert the bullish WedEX. It would also likely begin by gapping down under Thursday afternoon”s 2113.00 low, and probably also trend down through the opening 15 minutes. Regardless, the ultimate objective remains new highs.

Vulnerability to retracing reappears.

The late-morning touch of 2107.75 barely pierced the overnight high. Another 3 ticks higher would have been optimal for reacting down. The bias-up signal had not been triggered nor was it touched. Trending down would be difficult without first stretching the rubber band higher.

The passage of time has had a similar effect. Ranging narrowly between 2102.00-2105.00 through the noon hour wasn”t unusual. Actually narrowing the range through the bias environment was unusual. Its exit plunged 9 points to 2095.00.

The drop had potential down to 2097.50, which is clearly fulfilled. Oversold RSIs at the low make a premature recovery attempt suspicious — including the current bounce back up to 2099.00.

Until the low is retested, the bounce could reach 2101.00 before suggesting the rally has resumed. Meanwhile, testing fresh lows and recovering back above 2097.50 would start to signal momentum reversing up.

“Standing still is to fall behind.” – R. Buckminster Fuller

The rally followed my strategy for hovering under the noon hour”s highs until the bias environment began lapsing. Breaking above 2101.50 has extended 3 points to fresh highs testing 2104.25.

That may extend higher to test 2105.50. Regardless, the fresh highs create more room to absorb selling pressure, so that today”s close can still confirm yesterday”s breakout.

Meanwhile, the bias environment was exited above the noon hour”s high. The rally would gain traction if that were combined with entering the final hour above the bias environment”s 2102.75 high, or trending up to fresh session highs above 2104.50 through the 3:10-3:20 timing window.

But entering the final hour back under the morning”s 2101.50 high, or trending under it through 3:10-3:20 — would start to reverse momentum down. And this setup”s objective would be to close negative on the day.