Post-open Review

Gap up maintained and recovered, but not yet resumed.

Firming into the open up to 2816.00 initially blipped-up to 2818.00. Any higher would have been compelling to buy, but its resistance held. The opening 15 minutes of volatility fluctuated at or above the opening print to create an anchor.

That anchor was soon called upon to attract price back up to it, from a sudden dip down to 2811.50. But its recovery didn’t resume the rally, and another drop tested the 2809.75 bias-up signal by 3 ticks.

The bias-up signal triggered late. And back above 2814.50 would indicate the 2819.75 overnight high’s retest is likely underway. The bias-up environment could include another detour down to 2808.00, and since the 2817.50 bias-up target was met already, under 2808.00 would be vulnerable to launching a deeper decline.

Monday’s gap filled. Is that all?

Monday’s 2707.75 opening print was above all other highs in trend. If not extended, it would require being filled from below. Not arbitrarily, but after first dipping to test “lower prior highs.” Those lower prior highs have been tested since then, until last night’s rally greeted today’s open at 2803.50.

Post-open action extended higher relentlessly to 2808.25, neutralizing the “unfinished business” at 2707.75. Some resistance there was likely, although not necessary, and not necessarily substantial. But resistance there has pushed price down sharply to 2794.50.

While there is no longer unfinished business above, there is on requirement that neutralizing it now launches a new downleg. There’s also no requirement to extend higher, whether for a corrective bounce to 2803.50, or back to Monday’s highs up to 2812.50 or even to 2817.50.

Today’s sentiment can shift 180 degrees, multiple times. The only likelihood against reversing down would not come until this afternoon, if its bias environment were exited above the noon hour highs. The session otherwise remains vulnerable to probing lower lows.

Opening volatility fails to agree on a direction.

Recovering from the 2781.75 overnight low go to 2792.50 before the open. Dipping into and out of the open tested the 2788.00 bias-down signal. Its reaction pierced the pre-open high, and dipped back down to the post-open low.

The post-open low’s retest got to 2784.25. Another big bounce managed to overlap the 2788.00 bias-down signal at 10:15 to invoke the grace period. Like the open’s round trip, another dip to 2784.25 recovered in time to overlap the 2788.00 in time to trigger noN-bias.

Not bias-down, targeting 2781.50. Not no-bias, targeting an offsetting test of the 2794.00 bias-up signal. But noN-bias, able to fluctuate without intent. Choppy and sloppy. Be careful trading this morning’s pattern, which remains within the range and without an objective or limitation.

It’s not quite a “dry cleaners morning,” but still not for everyone. Meanwhile, here’s a video of this morning’s open when I discussed the alternative strategy of fading inflection points.

Post-open surge reacts down sharply, tries to bottom.

The 2780.50 overnight low’s recovery to 2787.50 suddenly surged at the open, extending to 2792.50 as the opening 15 minutes of volatility lapsed. That was sufficient for reversing back under 2790.00 to trigger a sell signal, which quickly dipped back down to the 2784.25 bias-down target.

Then one of today’s volatility catalysts was heard from — the U.S. China trade negotiator. Reaction to the headlines triggered a collapse down to the decline’s next lower objective at 2777.00. Its 5-point bounce up to 2782.25 reacted back down to momentarily probe a fresh low at 2775.00. But that has been recovered to 2783.50.

Back under 2777.75 would get another chance to resume the decline. Exiting the bias environment under 2777.00 would put into play the next lower objective at 2754.00.

Gap down holds relevant support.

Rallying from the 2783.25 overnight low had reached 2792.50 before opening at this morning’s 2791.50 bias-down signal. It held. Trending up more steeply through the first half-hour reached 2800.00.

Meanwhile, the bias-down signal held its test through 10:15 to trigger no-bias. An offsetting test of the bias-up signal is in-play. An offsetting test of the 2802.00 bias-up target is in-play.

2800.00 has been pierced since 10:15 by only 1 tick, which still qualifies as confirmation. A pullback has room down to 2795.25 before even suggesting another dip is underway, probably targeting 2784.25.