The open’s gap up held a test of the 1977.00 bias-up target. The open’s first 15 minutes of volatility held its reaction back under 1976.25 to make the bias-up target’s recovery unlikely. The balance of the morning trended back down to test the 1971.50 bias-up signal as support.
It's probed down to 1970.25 reacted up to 1973.25. Almost any higher would have reversed momentum up. But another dip probed fresh lows down to 1969.25.
Now, just recovering above 1971.50 would signal momentum reversing up. Exceeding 1974.25 (being attacked now) would confirm and the likely reward would be more fresh highs — serious fresh highs.
This morning’s high was above yesterday’s, but it still stopped pessimistically short of testing July 3’s prior highs. That is potentially bullish from a contrarian perspective, suggesting sellers are impatient weak hands. The bias environment began lapsing at its 1971.50 bias-up signal and ended lapsing there at noon so the interim dipped shorts.
Presumably, the extra interim dip was just defensive posturing ahead of the hawkish Fed speaker, scheduled at noon. His comments are already hitting the tape (spoiler alert: he’s calling for a rate hike) and the market has only improved. Beige Book may weigh on a recovery, but the recovery remains likely.