Post-open Review

Prior highs hold again.

There is no bearish reason to again retest 2390.75 post-open. In fact, it was touched pre-open in reaction to the Employment Situation report. Three errant ticks pierced it on the opening bar. It reacted down to 2388.00 through the opening 15 minutes of volatility. But 2388.00 was still being overlapped.

Nevertheless, the reaction has extended to 2385.00, triggering late bias-down. The pattern’s measurement’s target 2384.25. And an offsetting test of the 2382.00 bias-down signal is in-play.

Starting this morning’s dip from so high has created more room to expend selling pressure without it yet damaging the chart. Still overlapping 2388.00 at 9:45 suggests that sellers aren’t strong-handed, while buyers are patiently awaiting the rubber band to be stretched. No buy signal will be considered until testing an objective, or recovering 2388.00.

Regardless of the potential for its eventual recovery, the near-term objective is lower. And nothing prevents it being probed even deeper after the bias environment begins lapsing. RSIs haven’t even gotten oversold, so sellers are barely breaking a sweat.

Overnight gains retraced entirely.

Already backing-off from attacking 2391.00 ahead of four econ reports at 8:30, their reaction spiked down to attack 2386.00. That tested overnight “lower prior highs” and stopped optimistically short of touching yesterday’s late 2386.00 high.

Barely piercing 2386.00 at the open wasn’t any less optimistic. So, bouncing to the 2388.00 bias-up signal resolved down. And down, to 2381.25, triggering no-bias.

Actually, 2388.00 was on a buy signal above 2385.25 with potential to test the 2388.00 bias-up signal. That could extend higher after the no-bias environment constraint lapses.

Testing 2388.00 wouldn’t be surprising, but it’s only getting a small benefit of the doubt. Back under 2383.50 — which I’ll raise if the bounce extends higher — would resume the decline with potential to probe yesterday’s low.

Liquidity challenges make recoveries difficult, too.

The open gapped down under yesterday’s lows, to the 2381.00 overnight lows. A blip-down reacted back up to the 2383.50 bias-down signal. But it resolved down to fresh lows at 2379.00.

Another bounce on econ reports stopped short of the bias-down signal. Triggering cleanly didn’t hasten the decline. But it did resume, and with a vengeance. Attacking 2383.50 to within 3 ticks suddenly collapsed 7 points to 2375.50.

The 2378.00 bias-down target is met. So is Monday’s unfinished business at 2377.25. The predictable is done.

Recall the relevance of 2375.00. Recovering it last week for two consecutive sessions had put into play new highs. Delaying this correction doesn’t prevent that, but there’s room to retest 2375.00 down to 2374.00 or 2371.50.

Nothing has changed in this week’s global liquidity challenges. It inhibited yesterday’s trending, and similarly exacerbating this morning’s trending. The sponsorship is the same, so this morning’s trending is likely to be retraced.

Meanwhile, liquidity will soon become even more challenged ahead of this afternoon’s FOMC policy statement. A knee-jerk reaction probing under 2375.00 would be likely if not done before then, or if not already recovered back above yesterday’s lows. Actually trending down this afternoon is possible anyway, but not the likeliest resolution.

Another open, another test of key resistance.

Narrow ranging down to 2384.25 was recovered back to the overnight high pre-open. Its test of 2388.00 was repeated, and slightly exceeded, before price receded — once again trending down sharply through the open.

The slide barely paused until touching this morning’s 2383.75 bias-down signal. It was retested in time to invoke the grace period despite being probed by 1 point while RSIs were simultaneously oversold. Still, it held in time to avoid triggering.

This is a late no-bias environment. An offsetting test of the 2391.00 bias-up signal is in-play, but less reliably. Back above 2385.00 would make that more reliable.

But meanwhile, back under 2282.75 would start to signal “no-bias trending” to probe fresh lows anyway. And there’s no bullish reason to revisit yesterday’s ~2381.00 lows. Their test would be very vulnerable to breaking lower, and extending to 2377.25.

Overnight rally retraces entirely.

Two influences at this morning’s open stepped in to change the sentiment 180 degrees. First, relentless one-way overnight trending often reverses at the open. And second, greeting the new week with extreme sentiment is often a sentiment extreme.

Extended higher pre-open to 2387.50 and gapping up to the 2385.75 bias-up signal didn’t ensure remaining above Friday morning’s 2384.25 bias environment high. Post-open action has slid to 2380.75.

Another influence is now in-play. Having held a test of the bias-up signal, an offsetting test of the 2377.25 bias-down signal is in-play. This being a no-bias environment, the bias-down signal should define lower-end if tested this morning. Meanwhile, or later, it would likely be probed down to 2374.00 or 2371.50.

The eventual downside has met an opposing influence. The post-open reaction down filled the gap(s) back to Friday’s close, where RSIs diverged positively on its retest. Now, a bounce is testing the resistance of Friday morning’s 2384.25 bias environment high.