Mid-day Update… A gap too far.

Extending higher only stretched the rubber band.

The open’s gap up to 2848.00 is above all prior intraday highs. Its brief dip to 2845.50 support recovered as was expected, retesting the 2850.25 overnight high. The retest extended ultimately to 2855.25.

Ultimately, but gradually. This was not a good spot for enthusiasm to wane.

In this morning’s Market Tour I described the overnight rally as potentially being the failed follow-through to Monday’s capitulation. Tuesday’s pre-open dip had injected a bit of pessimism to keep alive the upside momentum. This morning’s pattern went the other way, injecting quite a bit of optimism.

Back under 2851.00 resumed the decline. This morning’s 2843.00 bias-up signal was broken when the bias environment came within view of lapsing. And now this afternoon’s 2829.50 bias-down target is exceeded to renew the bias-down signal.

Extending down further isn’t required, but this afternoon’s 2835.50 bias-down signal could contain a bounce. In fact, it’s trying to do that right now, after bouncing to 2838.00. Probing above 2835.50 during the bias-down environment would be a bias-down rally. Like no-bias trending, it would be doomed to failure, and require being retraced to the 2835.50 bias-down signal and possibly the 2827.00 10:15 print.

Meanwhile, a bounce back to the 2848.00 may be underway. Its test is likely at least to attack 2850.00. Regardless, today’s close either above or below yesterday afternoon’s 2837.00-2843.50 range would be predictive of the next major leg.