Post-open Review

Gap up scares away strong-handed reinforcements.

Gapping open beyond all prior sessions during a trend can be the inverse of a standing stop. Standing stops are opens in mid-range, no likelier to resolve in one direction than in the other. Similarly, gapping open beyond all prior sessions is equally likely to resolve in one direction or the other.

After extending to fresh highs pre-open, I was able to warn the chaRTroom of the unlikelihood for getting a reliable early signal. The opening 15 minutes of volatility probed higher several times, but kept returning to its 2807.75 opening print. Overnight buyers had not attracted reinforcements.

A buy signal’s inflection point at 2810.00 was overlapped plenty, only once by at least 4 ticks, and never beyond its 4-minute high. Its reaction overlapped a sell signal’s 2807.00 inflection point without exceeding its 4-minute low. The back-and-forth repeated with 2 more inflection points, and their tests only confirmed pre-open suspicions that an early signal would be difficult.

The sell signal’s retest was finally productive, exceeding its 3-4 minute low, even if only by a couple of errant ticks. And its test included the first detached bar. Rejecting the test would require such strong-handed sponsorship that a probe of fresh highs would be in-play. The dip has been violated, and a probe of fresh highs is now likely in-play, and likely targeting 2813.50. (Just met it.)

Quickly rejecting detached bars at the low’s retest gave us confidence in a reversal developing, rewarding both patience and limiting exposure to earlier signals per the warning. The new warning is more of a reminder, that still nothing requires extending any higher. Another downdraft would target 2802.00, and still require testing the 2807.75 opening print from below before a durable decline could be credible.

Rally effort holding resistance.

Gapping up to 2782.00 and attacking 2784.50 stopped short of retesting the overnight high’s attack on 2788.00. Gapping up above 2788.00 would have foreclosed on the downside, so it otherwise remains alive.

The post-open reaction down attacked the 2779.00 bias-up signal as support, which held. Its reaction attacked the overnight high to within 3 ticks. Bias-up triggered, but its 2784.50 bias-up target was still being touched at 10:15. Recovering it would have renewed the bias-up signal, so it otherwise requires new sponsorship.

Not recovering 2784.50 through the open has maintained the Globex-flip setup’s potential morning bearish influence. Back under 2783.25 would start to signal momentum reversing back down. The 2779.00 bias-up signal’s support would be a challenge until the bias environment began lapsing. Exiting the bias environment above 2784.50 would be vulnerable extending higher

This being a Friday, the morning’s bias tends to persist through the noon hour. So, reversing down depends greatly on reversing down into the bias environment exit, and more so on no extending higher this morning.

Upside rejected again.

Despite probing yesterday’s highs up to 2798.00 overnight, Wednesday’s 2786.00 cash session close was reversed before the open. As was the 2784.50 earlier Globex low, and both were maintained through Thursday’s opening 15 minutes of volatility. Both the Isolation and Globex-flip setups have formed.

The former setup carries substantially lower objectives, potentially 2730.00 and 2681.00. The latter setup influences this morning’s direction, and then also tomorrow morning’s direction if the afternoon doesn’t bounce.

Bias-down triggered, but wasn’t renewed because the 2772.25 bias-down target was still being touched at 10:15. The 2769.00 pre-10:15 low has also held, but its break would have potential to the 2753.00 61.8% retracement back into last Thursday-Friday’s gap.

One more point of interest, regardless of the potential downside objectives… Gapping down and exiting the open back under 2776.00-2777.00 continues to hold the door open for still forming a topping pattern. Recovering through the close would likely shut that door.

Little effort expended during narrow, encompassed opening range.

The relatively narrow overnight range was more noise than it was a pattern. A downtrending resistance of its highs was probed at 2779.00 just before the open, but no inflection developed. The opening 15 minutes of volatility only fluctuated narrowly between 2779.00-2781.50.

A blip-down to 2777.75 has reacted back up choppily to end the first hour attacking 2784.50. Still, neither bias signal was touched, not even attacked. So, neither bias signal requires being tested.

Perhaps the 2786.00 bias-up signal will be met, or attacked. That would be in-line with the 3-4 point trending attempts that I warned in the chaRTroom not to expect more of — if even relying on that much. Stretching the rubber band upward this morning might allow a more substantial snap back down, albeit still no likelier to leave yesterday’s range. Breaking higher would target a retest of yesterday’s 2787.50 high.

Overnight slide reverses straight up.

A relatively narrow sideways range had developed from Friday’s close through Monday and well past midnight. Its eventual break just after Europe’s opens was far enough removed from this morning’s open that we couldn’t rely on it being a false break. Butt that didn’t prevent its complete retracement anyway.

Fluctuating around unchanged at 2776.00-2777.00 had broken lower to 2767.00 where RSIs diverged positively. A 4-point bounce reacted down to touch 2766.00 at the open. Another bounce developed immediately, holding the 2767.75 bias-down signal.

Holding the bias-down signal’s test through 10:15 would put into play an offsetting test of the 2777.25 bias-up signal. But the post-open bounce was much stronger than its pre-open predecessor, and tested the bias-up signal in time to invoke the grace period.

Now having held a test of the bias-up signal, a test of the 2767.75 bias-down signal is back in-play. It’s not required to be tested since it was tested already post-open. But it’s usually tested anyway.

Perhaps more relevant is the non-arbitrary amount of buying pressure expended post-open. It touched a relevant resistance during a relevant window. Expending so much energy so soon leaves none in reserve, which I would have expected to eventually test the overnight highs. Instead, now the question is whether a test of the overnight lows is underway.