Mid-day Update… Not a safe neighborhood.

Bias-up target met already. Two bearish setups forming.

Before I go any further with the downside risks alluded to above, I should offer a reminder. Trends, especially rallies, are survivors. They find ways to survive that continually surprise me. One general theme is quite common — when appearing to be its most vulnerable to reversing, it finds the resolve to resume and extend.

This may be one of those times.

The trend is vulnerable because there is no “unfinished business above” attracting price higher. That, alone, is not a sell signal. It’s not like support is being broken, which can attract sellers. Resistance is being probed, which can attract buyers. This instance, however, has other challenges:

— unfinished business above is being neutralized almost as quickly as it is created (most recently this afternoon’s bias-up target that was met already at the 1:20 bias timing window),
— target’s and resistance are holding through relevant timing windows (e.g. this afternoon’s 2045.75 bias-up target),
— RSIs diverged negatively into the highs,
— the two-day ranging at trend highs now trying to probe resistance that has held through relevant timing windows,
— much buying pressure was expended to prevent this morning’s gap down which then attracted weak-handed buyers,
— a potentially bearish setup is forming that targets at least 2042.75, potentially 2037.75, and in the latter case possibly also new session lows.

Ranging around this afternoon’s 2045.75 bias-up target blipped-up to 2047.50 and suddenly its reaction down is testing 2044.50. Trending down immediately may be difficult since 1-minute RSI just hit its support at oversold. That can work itself out by firming momentarily.

That momentary probe is where rallies often revive themselves. Undeterred by my above list or by a list 10 times longer, defenders can appear from out of nowhere. A rally that can ignore so many bearish elements and extend higher anyway probably won’t be too long from printing new highs.

Either way, this area is unlikely to be visited for much longer. It’s too dangerous.