Post-open Review

Post-open dip pushes rally into a corner.

The overnight drop to 2384.25 had retraced exactly 61.8 o% of yesterday’s recovery. That’s constructive, and in fact it reacted up 7 points to 2391.50 before the open.

Dipping into and out of the open tested 2386.75. And tested it, and retested it. The 2386.25 bias-down signal was never touched before triggering no-bias. So, an offsetting test of the bias-up signal is not in-play.

Breaking lower to 2384.75 before 10:30 was too late to trigger bias-down, but it did invalidate the no-bias. Back above 2387.50 would be credible for launching a rally back up to the 2391.50 pre-open high. The morning may simply maintain the range, but a fresh low back under 2384.25 would open the door to new lows for the week — and close the door to new highs.

Overnight drop extends.

A pullback from yesterday’s 2397.00 high had room to test 2391.00 before signaling this week’s consolidation was breaking lower. But a valid recovery would be underway already at the open or very soon after, to isolate sellers to the overnight. Opening at 2391.00 firmed to 2392.25 where any higher would have triggered a buy signal. It was only touched.

Under 2388.00 through the opening 15 minutes of volatility would have made the 2391.75 bias-down signal likely to trigger at 10:15. Pre-open lows had touched 2388.00, and it was still being overlapped at 9:45, so it didn’t offer any extra input.

Regardless, the overnight drop extended sharply.The 2386.75 bias-down target was exceeded on the way down to 2380.75, which was probed down to 2379.00. RSIs finally diverged positively on its retest, launching a bounce now testing 2383.00.

Not extending down to 2375.00 or deeper depends almost entirely upon entering the noon hour above this morning’s 2391.00 bias-down signal. Just recovering 2383.50 would be credible, if the recovery were extended into the noon hour’s exit. Otherwise, just consolidating in the low’s range through another timing window would be likely to resolve down.

Bias-down signal’s test holding. Holding…

Gapping down 2-3 points immediately tested this morning’s 2391.00 bias-down signal. The first half-hour tested the bias-down signal. A fresh post-open high up to 2393.25 at 10:15 was still retraced to test 2391.00. And that test probed a fresh post-open low down to 2389.25, right up to 10:30. But that bar also touched the bias-down signal.

So, this is a no-bias environment. Having held a test of the bias-down signal, an offsetting test of the 2397.00 bias-up signal. Exiting the bias environment at 11:30 back under 2389.25 would at least suggest a deeper detour underway. But back above 2392.50 should launch an upleg that trades the overnight range for a retest of yesterday’s opening range.

Gap up maintained and extended.

The open immediately did something that all of yesterday had failed — it touched yesterday’s 2397.75 opening peak. It was overlapped through the open, instead of reacting down like yesterday. But overlapping it also meant not extending higher. Not through the open.

So, an opportunity to establish upside momentum wasn’t exploited. At least it wasn’t rejected.

Fresh highs up to 2400.00 did something that all of the open had failed — it touched the 2399.00 pre-open high, which was also Friday’s post-close high. Not during the opening 15 minutes of volatility, but afterward.

So, its opportunity to establish upside momentum wasn’t exploited. But unlike the actual test of 2397.75, it wasn’t even attempted. That’s pessimism, which is potentially bullish from a contrarian perspective.

2399.00 is still being tested one hour past the open. Sponsorship isn’t rushing in. A dip may yet be necessary, but unlikely to extend or to invalidate the bias-up. Perhaps only noise down to 2397.00. No sell signal will be considered above 2395.50.

Plus ca change, plus la meme chose.

Plus ca change, plus la meme chose. Reversed, I know. As it should be, with a noN-bias. The bias-down signal was touched overnight, but the open bounced up to Friday’s cash and futures session closes at 2396.00 and 2397.75. Then plunged to touch the 2392.25 bias-down signal.

Bias-down’s grace period was invoked, but was still being tested at 10:30 to trigger noN-bias. The bias-down target isn’t in-play. Neither is an offsetting test of the bias-up signal. Also, there’s no constraint for the bias-down signal to define the morning’s lows.

And now having probed a fresh low down to 2391.25, the next lower attraction is 2388.00. The 2387.00 bias-down target doesn’t require being tested due to the bias-down signal’s very late break.

Being a noN-bias environment, back above the 2394.00 area would be credible for extending. Sunday night’s high is still likely at some point to be probed. Delaying the rejection of an essentially flat open undermines the sponsorship behind the late selling. And a lot of support still lies at Friday’s mid-day “lower prior highs.”