Post-open Review

Draghi spoke, futures spiked.

Structurally, the overnight pattern tracked another bottoming template by probing under Tuesday night’s 2356.50 low. Opening back above yesterday’s lows essentially isolated the probe to the overnight.

Calculably, fresh lows touching 2354.50 would have been optimal before rallying. But not necessary — there is no unfinished business below.

And there’s no new unfinished business above. The 2366.50 bias-up signal was not touched. So, it didn’t trigger and it wasn’t rejected. The bias-up signal should defined the morning’s upper-end if it is tested.

Exceeding the 2366.50 bias-up signal through 10:30 would invalidate the no-bias that triggered at 10:15. A rally would then be credible. Probing it after 10:30 could extend higher, too, but as no-bias trending which is doomed to failure.

The only other bullish template would simply slow-play the recovery. Hovering at post-open highs until the bias environment begins lapsing would then be postured to extend higher into the afternoon.

Back under 2360.50 would instead start to suggest fresh lows — e.g. 2354.50 — are in-play.

Several setups suggested selling’s subsided. One wouldn’t.

I’ve seen bigger paradigm shifts, but this one was still obvious. Overnight probing 5 points under yesterday’s low down to 2359.50 was recovered to greet the open 5 points into positive territory at 2370.00.

Extending 3 points higher to 2373.00 was retraced to 2367.50. Holding a test of the 2370.75 bias-up signal triggered no-bias, and put into play an offsetting test of the 2363.75 bias-down signal.

The no-bias signal can be rejected, without yet probing under the pre-10:15 low. One setup would recover the 2370.75 bias-up signal through 10:30. Another setup would recover the open’s 2373.00 highs upon exiting the bias environment at 11:30-noon. I’m monitoring for either based on these earlier setups:

Maintaining the gap up isolated the probe under yesterday’s lows, especially having touched the next lower objective of a multi-session decline, which likely reverses the trend back up.

The overnight low’s Symmetrical Triangle could have attracted price back down for its first break being false, but it had no influence during the opening 15 minutes.

Recovering 2372.00 through 9:45 would have made bias-up likelier to trigger. Its test wasn’t rejected by then. If the bullish setups I describe above don’t allow rejecting the no-bias, they could still help to absorb and recover from fulfilling the downside objective.

Extra dip delays ultimate bottoming pattern.

Pre-open selling had pierced the overnight Globex session’s initial 2370.50 low, touching this morning’s 2370.00 bias-down signal. I wanted it touched post-open, too — and preferably pierced by at least 1 tick —  before being confident it wouldn’t trigger.

The open did pierce it by 1 tick, and then snapped back up. But only momentarily ahead of a 5-point drop. Although not required, yesterday’s low was pierced by 3 ticks down to 2366.25.

There was news: a security incident at or near the London Bridge / subway station. Presumably, anxiousness had triggered the extra dip. At least, that’s what I presumed.

In fact, 2370.00 was touched just in time to invoke the grace period. “Late no-bias” triggered at 10:30, already having surged up to 2373.50. And that was exceeded momentarily by another point.

An offsetting test of the 2377.50 bias-up signal is in-play. A test of 2381.50 is also likely at some point, to whatever degree. More importantly, the bottoming template we’ve been tracking remains intact.

Probing under last week’s lows.

Retracing the overnight bounce to 2376.25 greeted the open under Thursday night and lows. The probe under Friday’s intraday lows would not be isolated to the overnight. An intraday test of 2368.50 became likely, making early-entry compelling.

The open did extend down quickly to touch 2368.50. Only 3-minute RSI became oversold before its reaction bounced up to test 2373.25. The 2375.00 bias-down signal was triggered easily.

2368.50 is being probed down to 2367.25. That wasn’t necessary, so its retest is likely to be probed down to 2364.00-2365.00.

Regardless, now that Friday’s low is being probed, there is potential for this morning to contain the pullback’s low. Not bottoming today would suggest a much deeper pullback underway.

Weak attempt to isolate sellers has marginalized buyers.

Probing lower overnight at least touched the upper-end of the 2372.25-2373.75 objective. This created an opportunity to reverse momentum up. But the open needed to have recovered already back into Thursday’s range.

Isolating sellers to the overnight that way would have allowed a rally this morning. Not trying to isolate sellers still could have rallied, perhaps by holding a test of the bias-down signal.

But trying to isolate sellers and failing has only marginalized buyers. The open’s blip-up to resistance at 2181.50 resolved down to test the 2378.50 bias-down signal. The grace period it triggered resolved down to attack the overnight low.

Now another bounce is starting to resolve down. The 2372.25-2373.75 objective’s lower-end is also this morning’s bias-down target. Lower objectives would be put into play at 2368.50 and 2364.00 if the bias-down target fails to hold.