Mid-day Update… No news would be better news.

Flynn statement rattles the market.

This morning’s no-bias had at least attacked its 2651.00 bias-up signal. No-bias trending above it would have been credible. Doomed, but credible. Then the news broke that Mike Flynn would please guilty, driving the market down sharply. Then another headline that Flynn claimed he was directed by Trump.

Tuesday afternoon’s “unfinished business below” at 2617.50 was neutralized to within 2-3 ticks. Its reaction up was undermined by 3-minute RSI being persistently oversold. Indeed, another plunge collapsed to touch 2605.00.

2605.00 was the next lower objective under 2617.50 that I described during this morning’s Market Tour. Its first reaction up tested 2627.00. This afternoon has extended higher to trigger the 2632.00 bias-up signal. Its 2637.50 bias-up target is now being probed up to 2640.00.

This morning’s collapse was triggered by a knee-jerk reaction to headlines. This is almost always retraced entirely, often sooner rather than later. The plunge’s 2649.00 origin is now only 9 points higher, having rallied 35 points off the low.

Meanwhile, the tax reform vote is scheduled to begin at 2:00. It’s very likely to pass, but the past two sessions already expressed a lot of favorable sentiment for that. An obligatory knee-jerk reaction to the vote could get the market back to the plunge’s 2649.00 origin — perhaps through it to also test 2654.00. Or the plunge’s origin may have been tested already.

No other optimistic development could be anticipated before the close. And the weekend’s impending illiquidity could trigger Friday Factors that influence selling into the close. New session lows would be possible, but not required. Just reacting down would be likely, although be careful of a bigger squeeze into the weekend — the Flynn news may have been overly-discounted, too.