Pre-close View

Pullback limit violated, finally, but not reversed down.

What”s the opposite of up? It”s “not up.” 

The knee-jerk answer is “down.” That would be the opposite direction of up. Not trending up doesn”t necessarily default to trending down.

And finally violating the 10th pullback limit test, i.e. trading deeper than its first 3 minutes, doesn”t equate to a sell signal. It only means the upward momentum has lapsed.

Downward momentum can still catch, and it”s trying — probing a fresh afternoon low down to 2075.75.

But back above 2078.50 would be likely to extend steeply and substantially into the close. Having rallied through each prior timing window, the final timing window becomes likelier to also probe a fresh high, or at least less likely to trend back down.

Narrow, choppy and sideways ahead of the holiday.

Volume and participation evaporate ahead of most three-day holiday weekends. That was one factor which contributed to expecting the open”s trending to be substantial. The delayed recovery from Tuesday night”s dip had only a small window of opportunity, and a long way to go.

It got there.

The morning”s renewed bias-up signal doesn”t require fulfilling its target like a simple bias-up, but it”s a target. And it doesn”t marginalize sellers altogether, but it does minimize them.

So, sellers have been unlikely to regain control, while buyers haven”t been much likelier to exert any more control. A window has opened at 3:37, in the form of the position-squaring window. Getting through 2060.75-2061.25 and 2063.00-2064.00 could tick higher to 2068.75-2070.50 through the close.

Otherwise, there”s no requirement to tick higher at all, and little likelihood of ticking down.

Overnight recovery didn”t stick, and no other is being tried.

Recovering most of the open”s plunge this morning left a choppy, sideways range. The noon hour”s dip to 2046.50 reacted up to 2054.50 resistance. Retesting 2064.50 a couple of times this afternoon has just reacted up to 2052.00.

It”s all just ranging around 2054.50. That”s last Friday”s “lower prior high.” At least, it was lower yesterday, and it was the next objective under yesterday”s range. Now it”s resistance, and either way it is influential.

Breaking under 2046.50 earlier would have targeted fresh lows at 2039.00 or lower. The delay”s pent-up buying pressure just surged to 2052.00. That was probably just to stretch the rubber band, which is now snapping back down to attack 2048.00.

Closing under 2046.50 would make a hold-short compelling. Otherwise, it”s all just noise.

This afternoon”s no-bias environment began lapsing at 2:30. Its 2073.50 bias-up signal had held its test as resistance, reacting down to 2068.00. Back above 2071.00 would have given one more chance to a rally.

2071.00 was touched, but not even pierced before reacting down sharply to fresh post-open lows attacking 2065.00. And now that has extended to probe under last night”s lows down to 2059.25.

Lower lows would target 2057.50 and 2054.50 unless 2062.00-2063.00 is recovered into or out of the 3:37 PM position-squaring window.

Only one timing window has avoided probing a prior high.

Gapping up Friday above Thursday afternoon”s high would have formed a session-long rally setup, since Thursday”s close had trended down.

Friday”s session did not just avoid gapping up. It was a non-event. So, gapping up today above Thursday afternoon”s high had bullish potential for expending pent-up buying pressure.

And this morning”s open gapped up a lot.

I discount a session-long rally setup that forms on Mondays, because the weekend can soften the prior week”s sentiment. I barely even consider a session-long rally setup that ignores a session.

But it is interesting that only one timing window today has not probed its prior timing window”s high (this morning”s bias environment, not the noon hour). One timing window, so far. 

The final hour is being entered shortly. Will it probe a fresh high? Having neutralized the upside attraction  (assuming it is), will the a reversal down develop without? 

The balance of the session isn”t immune from trending back down, anyway. But the 2082.25 bias-up signal should be met first.