Pre-close View… Refueling buyers, or warning them?

Bias-up dip seems ominous.

This afternoon’s 2169.25 bias-up signal triggered cleanly at 1:20. Despite not yet having extended above its pre-1:20 2172.75 high, the bias-up signal was maintained through 1:30. So, rejecting its 2175.50 target would require exiting the bias environment at 2:30 back under its 2163.50 bias-down signal.

None of which prevented a 6-1/2 point plunge, which extended down to attack 2163.50 to within 3 ticks. That was within minutes of 2:30. And it still held. So, not for lack of trying to reject it, but the 2175.50 bias-up target becomes “unfinished business above.” Its eventual test is required before a durable decline would be credible.

In fact, the plunge has been retraced entirely to retest 2171.00. That’s still not a fresh session high, let alone the 2175.50 bias-up target. But it helps to confirm the plunge’s bias-up context.

The only question is whether the plunge refueled buyers (i.e. trapped shorts in order to squeeze them) to extend the rally, or if the bias-up plunge is warning that the rally is waning. How about a little of each.

Back under 2167.00 can trigger another downdraft, plunge-like or not. But reacting down after testing the  2175.50 bias-up target can produce a durable downleg. Which the bias-up plunge suggests.