Mid-day Update… Needed: One scapegoat.

Morning’s plunge has no direct cause.

This morning;s 2166.00 bias-up signal did not trigger. Not for lack of trying, having been probed by 2 points. But holding its test put into play an offsetting test of the 2155.75 bias-down signal.

Invalidating the no bias at 10:30 wouldn’t have surprised me, with upside attractions being so near. But the market knows better. A sell signal triggered under 2164.25, the bottom dropped out, and a 30-minute 10-point plunge was suddenly probing 2 points under yesterday’s low down to 2153.75.

The noon hour retraced the entire plunge back up to 2164.00. But only retraced it. It wasn’t reversed or rejected. So, no-bias has triggered, despite probing 2 points above the 2161.75 bias-up signal. Again.

This afternoon’s 2153.25 bias-down signal doesn’t require being tested. But it probably will be tested, while retesting this morning’s 2153.75 low. That’s required because it was accompanied by simultaneously oversold 1-mijnute and 3-minute RSIs.

This morning’s brief test of 2156.00-2158.00 could have been dismissed. It happened during a no-bias environment and it was recovered by noon. This afternoon’s test of 2156.00-2158.00 could also be dismissed for similar reasons. But the burden of proof is on there being a forcible recovery coming out of the bias environment.

One problem for a recovery is the lack of a scapegoat for this morning’s plunge. There are plenty of candidates, but no specific catalyst. Even the worst news item can be discounted — however deeply, and forever how long it might take — and then the market can get back to business.

That’s difficult when lacking a scapegoat. So, be careful with longs until a prior high is recovered.