No-bias rally ahead?

[pay]The afternoon’s ESu 1278’00 bias-down signal held its test through 1:20, signaling no-bias, and putting into play a test of the 1285’25 bias-up signal.

Beige Book due in 25 minutes at 2:00 typically has a big effect on volatility. Greeting the news from above 1285’25 would allow a relatively tight stop for long positions exposed to the potential for bullish reaction. Under 1278’00 would be much less predictable, and not necessarily bearish. Greeting the data from between the two signals would not be predictable at all.

An interesting pattern has formed from this morning’s two pullbacks, where one more surge as high as 1303’00 would be vulnerable to plunging sharply. But any bullish pattern relies entirely upon these pullbacks holding the 1278’00 area, whose lengthy uncomfortable test can be excused only as ill-fated pessimism ahead of this afternoon’s event.

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