Post-open Review

Post-open low could qualify as a bottom.

The overnight rally had extended pre-open to within 1 tick of 2353.00. Post-open action fulfilled expectations by reacting down from the pre-open rally. Twice. A 5-point dip through the open was recovered entirely to 2353.00, then reversed to a fresh low within 1 tick of the 2344.75 bias-down signal.

Then recovered entirely again. Twice. First to a 2354.00 during a televised news conference. And now — after invoking the 2351.00 bias-up signal’s grace period — to 2355.50. The 2357.50 bias-up target is in-play.

The post-open probe under yesterday’s intraday low makes a bottom credible, as was described at yesterday’s close. Actually touching 2344.75 post-open was narrowly avoided, but it was as close as possible, and the overnight probe was much deeper.

Nevertheless, extending and/or maintaining this afternoon would be more predictive. Anxiousness ahead of tomorrow’s Employment Report will make that difficult.

Pre-open setup launches post-open surge.

I had noted in the pre-open Market Tour that it might seem self-evident, but the path up is up. Sometimes, the path higher requires first resolving unfinished business below. Not today. As much as yesterday prevented invalidating its attraction below, price extended higher. A dip probably wouldn’t have been absorbed.

In fact, rallying into and out of the pre-open ADP report probed above both Tuesday AND Monday’s highs. Greeting the open at 2363.00 was likely to extend higher without delay, if extending higher at all. Quickly rallying through the 2364.00 bias-up target extended relentlessly to the 2369.00 renewed bias-up target.

And then through it to the doubly-renewed 2374.25 target, which was just probed by 3 ticks.

Reacting down from 2374.25 would require a retest of the highs, as both 1-minute and 3-minute RSIs are simultaneously overbought. Exiting the bias environment above 2369.00 would suggest that the pullback from 2400.00 has ended, putting into play new highs.

Hesitation, consolidation, or backing-and-filling ahead of this afternoon’s FOMC Minutes release would be justified. It also wouldn’t be surprising for any pause to be shallower than deep, if at all.

Pre-open recovery gets post-open attack.

The overnight dip ultimately touched this morning’s 2344.75 bias-down target. It was recovered to greet the open at 2350.75. And after a dip touched the 2349.75 bias-down signal, the recovery extended to 2354.50.

None of which prevented a 6-point slide to 2346.50. It was consolidated back up to 2349.75, which triggered bias-down.

Recovering 2349.75 through 10:30 could have invalidated that it had triggered at 10:15. Indeed, surging through it touched 2352.50. But the 10:30 bar was still overlapping 2349.75, literally 1 minute too late to qualify.

This is a bias-down environment. In fact, the bounce to 2352.50 just reacted back down 4 points. Its failure is so far only partial, and not yet printing a fresh post-10:15 low, which still allows invalidating the bias-down.

Meanwhile, the 2344.75 bias-down target remains intact. This morning’s dip may be absorbed ultimately, from a deeper level. But the dip must hold yesterday’s lows through a relevant timing window, or else 2321.00 and lower would come into play.

Uptrending support breaks. Hard.

Opening unchanged at 2359.25 had ranged 2358.00-2361.75 through the open, surrounded by econ reports. But that only inhibited a resolution. Fresh lows after the first half-hour also broke the uptrending pivotal support I described during the Tour.

This morning’s 2357.75 bias-down signal triggered cleanly on the way down to 2352.75. Bouncing only touched the bias-down signal, which doesn’t suffice for invalidating a cleanly triggered signal. Shorting there, with a SAR above 2359.00, was soon probing back under its 2355.00 inflection point.

And already, the 2350.50 bias-down target has been met. And also probed. A lot. The 2348.75 connector of the uptrending pivotal support is being probed. A lot. RSIs are oversold.

Having tested 2348.75, entering the noon hour back above 2350.50 would suggest the selling has ended. Not recovering 2348.75 would next target the “unfinished business below” at 2348.25 still outstanding from last week.

Already breaking lower to 2343.50 makes the 2342.25 unfinished business likelier. Which had better hold its test, because the 2321.00 attraction below it could be probed by 10 points.

Relatively narrow opening range, holding.

Similar to Thursday’s open, not trending down through the open has made trending down this morning unlikely. Dipping overnight to 2357.00 had bounced pre-open to 2363.00. Dipping again into the open was very short-lived, and it only attacked the 2358.25 bias-down signal to within 1 tick.

Reversing back up has attacked 2365.00. Its still negative territory, but it’s not arbitrary. There was an effort to break lower, and the effort failed through relevant timing windows. Sellers are likely marginalized for the morning… or later.

Meanwhile, only attacking the bias-down signal — even all the way to within 1 tick — doesn’t equate to actually touching it. So, an offsetting test of its 2366.25 bias-up signal isn’t required. Not officially, but it’s still likely. And at least an obligatory probe above yesterday’s 2367.00 highs is likely, too.