No-bias trending, or new sponsorship?

[pay]A break to new session lows probed 990’00 as support. This is last Friday’s “higher prior lows” that Monday’s opening surge was required to test as support before extending higher. And that test was productive, launching a bounce up to nearly 1008’00. So, there should be no reason for retesting this level again, not unless momentum is reversing down.

Monday morning’s test of 990’00 probed it by more than 1 point. This afternoon’s dip is trying to bounce from probing it by 1 tick. A little too much optimism to form a durable bottom.

But the break did originate during a no-bias environment. So it is likely to be retraced entirely, regardless of the eventual resolution. If the weakness is just pessimistic discounting ahead of tomorrow’s Employment Situation report, then it should be recovered back above the last relative high at 998’00.

If a bounce holds the 996’00 area as resistance, then this afternoon’s weakness is more likely another warning shot across the bow at buyers. Regardless, there won’t be any signal to hold either long or short through today’s close, not ahead of an Employment report.

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