Pre-close View

Hovering comfortably at session highs… too comfortably?

A reaction down from testing 2130.25 resistance slid to 2125.75. And then it recovered completely. That was fast.

That was fast, shallow and temporary. All hallmarks of an environment that is lacking sponsorship.

That can cut either way, since resistance above the rally”s 2128.00 target is no less chipped away than support at 2125.25 down to 2122.50.

FOMC reaction probes fresh highs, intraday.

Ranging had narrowed back to 2122.50 when the FOMC Minutes were released. The reaction surged to 2128.00, and then to 2132.00, where likely resistance had been calculated.

It”s been straight down since then. The minimum pullback objective at 2127.25 was also the likely objective. Bounces to 2129.00 resistance resolved down sharply to 2121.50.

The bigger picture is on-track for deteriorating even further from yesterday”s conditions. Today”s new high originated intraday from under the two prior sessions” intraday highs, 2128.75 and 2130.50. Having probed above them, closing back under them would underscore this area”s resolve. It wouldn”t prevent a fresh high Thursday, perhaps even retesting yesterday”s 2134.00 pre-open high. But any early strength Thursday still would be vulnerable to collapsing through the afternoon.

Now another bounce is targeting 2126.00 resistance. Extending higher to close above yesterday”s 2130.50 high would trigger a bullish three-day weekend indicator, and potentially marginalize sellers through Tuesday morning. But back under 2122.50 would trigger a new downleg.

New high”s reaction down is extending.

An offsetting test of this morning”s 2119.25 bias-down signal was put into play by holding the 2127.25 bias-up signal”s test through 10:15. And then by failing the attempt to recover 2127.25 by 10:30. And then by failing the attempt to recover 2127.75 by 11:30.

All the while, price was trending up. Higher highs and higher lows formed an Ascending Triangle that persisted through the noon hour. The pattern projected a false break higher, which reversed down from its 2129.50 target area.

That reversal down has extended to fresh session lows. Both 1-minute and 3-minute RSIs ere oversold at the 2121.25 low, requiring its retest. A 4-point bounce may not have prevented the drop from resuming today. 

Regardless of the bounce”s resolution today, the reaction down from overnight highs should be alarming. 

– The 2128.00 target was met yesterday,
– the room for noise up to 2133.00 was tested,
– the overnight high is not a new  “Globex trending extreme” requiring intraday retest,
– and probing above yesterday”s high intraday (up to 2130.25 this afternoon) was reversed to a fresh session low.

The bigger picture still expects the ultimate high to be shallow and to be reversed abruptly into a durable downleg. Not exceeding today”s highs  through tomorrow”s close might be due to already trending down sharply.

Still probing fresh highs.

Sellers were unable to exploit the bullish WedEX”s expiring influence. The noon hour”s narrow ranging barely pierced its 2123.00 pullback limit. The afternoon”s noN-bias signal allowed fresh highs up to 2127.50.

That”s within 3 ticks of the 2128.00 target. 

A 2-point dip has recovered into the final hour. But although the bias environment was exited above the noon hour”s high, the final hour wasn”t entered above the bias environment”s high. That would have signaled buyers gaining traction. 

There”s a proxy — trending up through the 3:10-3:20 timing window could signal a short-squeeze underway with room up to 2133.00.

Unless the 3:10-3:20 timing window were to trend down, the session continues to be more vulnerable to trending up than to ranging or to reversing down.

Bias-up target neutralized. Buyers, too?

The bias environment was exited above the noon hour”s high. But the final hour”s entry was within the bias environment”s range. So, buyers haven”t gained traction for their efforts. Meanwhile, their efforts have been rewarded by coming to within 3 ticks of the 2117.75 bias-up target.

Extending higher through the 3:10-3:20 window would serve by proxy for having entered the final hour meekly. In fact, the window just opened by probing fresh highs.

That 3:10-3:20 can become bearish if its rally effort fails. Exiting the window back under the highs it started probing would trap longs, not shorts.

So long as 2116.25 were to hold a test as support, the balance of the session could extend to new highs. Back under 2114.75 would signal momentum reversing down for a corrective dip to 2111.75.