Pre-close View

FOMC statement”s time in the spotlight hasn”t been terribly bullish.

A bounce to 2102.00 greeted the FOMC policy statement. That was a 61.8% retracement of the last intraday downleg, including its maximum room for noise.

The knee-jerk reaction down to 2095.25 was retraced to 2103.50. Another plunge down precisely to 2095.25 was again retraced precisely to 2095.25. Did I mention precisely?

Deja vu? Untrustworthy base. Despite its next reaction triggering buy signals that extended another 7-1/2 points, the base wasn”t likely to produce a durable rally leg. In fact, a reaction down just touched 2097.25.

A durable recovery is still likely, but not by that first rally leg. Back above 2101.50 (being pierced momentarily now) would allow the shallower 2097.25 pullback to serve by proxy for the deeper 2093.50. Back above 2104.25-2015.00 could trigger a massive short-squeeze.

Recovery still needs to squeeze a couple of shorts.

Trending higher through the noon hour probed the 2109.00 afternoon bias-up signal by 5 ticks. It avoided the grace period by 1 tick, but was invalidated by failing to hold it through 1:30.

The bias environment drifted back down into the 2104.25-2105.00 range, whose resistance launched the overnight and post-open drops. Now its support must launch a closing rally.

Just ranging sideways through the close would suggest a downleg tomorrow or overnight. Its recovery wouldn”t be assured — getting to within the orbit of this morning”s oversold RSIs at 2088.25 would make its retest likely. And it”s retest isn”t likely to hold. A corrective dip to only 2099.00 could still qualifying as refueling the rally.

But why bother with another dip. The recovery from probing again under 2190.00-2195.25 is equivalent to 3 Red Bulls and half a Ritalin. The rally would be better served by getting some of that out of its system, by closing above the bias environment”s highs, preferably at least above 2114.75. And preferably by extending through the 3:1–3:20 timing window since the final hour”s entry didn”t trend.

Afternoon lows didn”t extend.

The slide to 2104.25 had reacted up to 2109.00. That range has persisted for 90 minutes. There remains room down to 2103.00 without yet signaling anything more substantial, although that”s more precarious now after the bias environment has lapsed.

Any durable trending should be underway through the 3:10-3:20 timing window. And that”s because two other timing windows already failed to extend down — the 2:30 bias environment exit and the 3:00 final hour entry.

It”s too late to trigger  short-squeeze. But back above 2107.50-2109.00 would still target the 2114.00 area. Meanwhile, still ranging around Friday morning”s 2106.00 low after 3:10-3:20 would make any later trending weak-handed and temporary.

Hovering at the highs wasn”t exploited.

The bias environment was exited at 2113.00, still within the noon hour”s range, and didn”t improve from there. Another 3 ticks higher would have triggered a short-squeeze into the weekend. Instead, a drop tested 2109.00.

Now the final hour has been entered under the bias environment”s range. Trending even lower through the 3:10-3:20 timing window would point down into the close. But it would be too late to give sellers traction for their effort, which needed to begin at the bias environment”s exit.

Under 2108.50 could extend to attack 2104.00. Back above 2111.25 would be attracted back to session highs, but not necessarily higher soon enough to confirm yesterday”s breakout.

Fresh highs aren”t too optimistic. Not, yet.

This afternoon”s 2098.25 bias-up signal was still being tested at 1:20, and not triggered at 1:30. Being a late no-bias environment. The 2098.25 bias-up signal is likely to be retested, but it”s not necessary.

So, the no-bias trending up to 2102.75 can extend higher.

But since the final hour isn”t being entered above the bias environment”s high, the 3:10-3:20 window must trend higher to maintain the rally”s momentum.

Dipping back under 2100.25 would target 2098.25, with 1 point of room for noise under it. Dipping first would be difficult to resume rallying today.