Post-open Review

Overnight low’s retest is retraced.

The first tick was essentially flat but that was followed immediately by a spike down to 2261.50. Its consolidation through the first 15 minutes — and through the first half-hour — held yesterday’s 2263.50 lows as resistance. The isolation setup failed. So did any attempt to reject the open’s probe under yesterday’s lows.

That’s bearish.

Another spike down during the first half-hour of 4-1/2 points touched the 2259.50 overnight low. Recovering it almost entirely in time to invoke the grace period barely recovered the 2263.00 bias-down signal in time to avoid triggering bias-down.

That’s bullish.

Now a surge has touched fresh post-open highs at 2266.00. Which would certainly seem bullish. One problem, though, and it’s the same problem that plagued yesterday’s recovery attempts — too late. Like yesterday’s blip-up just AFTER entering the final hour, and a small surge just AFTER the proxy window had closed. This surge originated just AFTER 10:30, when a fresh post-open high would have been optimal.

That’s mixed signals.

Probing under the 2263.00 area as the bias environment begins lapsing would reject the late signal. It would also be credible for resuming yesterday’s opening break that today’s open tried to resume. Nothing can reinstate this morning’s potentially bullish scenarios, but exiting the bias environment above 2268.00 would undermine the bearish scenario.

Overnight slide extends, to a point.

Fresh lows were tested pre-open down to 2267.25. The slide’s slope immediately steepened on the way down to 2263.50. Its reaction back up to 2267.25 held, and defined fluctuation around the 2265.50 bias-down signal.

2265.50 was touched within 3 minutes of 10:15 to invoke the grace period. It happened to be recovered through 10:30 to trigger late no-bias. An offsetting test of the 2275.50 bias-up signal is in-play.

The bullish scenario is that these two most recent thrusts downward reflect distribution. No argument from me. But they’re still digging deeply enough early enough for long enough to reflect strong hands reversing the trend down.

Back under 2264.25 would suggest otherwise. The late signal hasn’t yet produced a fresh post-open high, so its objective would be moot. And a multi-session downleg would likely be underway.

Another sell-off, another recovery.

Opening at this morning’s 2266.00 bias-up signal didn’t attract any strong-handed sponsorship. At least, no buyers. Immediately plunging barely stopped until piercing the 2258.75 bias-down signal by 2 ticks.

Actually, the plunge did stop there. Bouncing nearly 4 points was largely retraced back to the low. Bouncing again recovered back up to 2266.00. Both bias signals held tests, so no offsetting test of the other bias signal is required. It is otherwise a normal no-bias environment.

The opening drop is a third sell-off thrown at the market, including Wednesday night’s choppy drift and yesterday morning’s EIA reaction. It’s also the third to recover completely. All of which is potentially bullish, if ever the recoveries’ ~2264.50 high were exceeded coming out of a timing window..

Hovering at or under session highs could launch a new upleg into and out of the noon hour. A dip to 2261.00 just retraced 61.8% of the bounce. That’s not hovering. But quickly recovering back up to the bounce’s highs — quickly — and then consolidating there would still be credible for launching an afternoon upleg.

Inhibition ahead of late-morning and early-afternoon Fed speakers could be responsible for a range-bound morning. They could also be the catalyst to breaking out either way. Late-afternoon Fed speakers will keep participants jumpy, too.

Overnight selling stopped.

Extending the overnight decline this morning required that post-open sellers make themselves obvious almost immediately. They didn’t.

Drifting downward relentlessly until testing the 2259.25 bias-down signal was unable to attract new sponsorship. Overnight headlines were discounted overnight. The open bounced.

Not that momentum has reversed up. Unchanged around 2264.50 has held several tests as resistance. And not that a recovery is required. The open’s blip-down to 2260.50 didn’t touch the bias-down signal, so no offsetting test of the 2267.75 bias-up signal is required.

But the burden of proof was on sellers, and they offered none. Whether this morning or this afternoon, an actual rally through yesterday’s 2267.00 high is likely. And probably also through last week’s 2269.50 high and higher. Only exiting the bias environment under its bias-down signal would start to suggest otherwise.

Gap up above prior highs is maintained.

Extending yesterday’s late rally this morning was likely to begin immediately, if at all. The 2256.25 open shot up 5 points, and then another 3-1/2 points to touch 2263.75. That was the first 5 minutes.

So, resuming the rally did start immediately. Fulfilling the rally was pretty immediately, too. The balance of the first hour back-and-filled down to 2257.50. The 2259.50 bias-up target was exceeded through 10:15 to renew the bias-up signal, although its renewed bias-up target was already pierced at the high.

But the open’s range was maintained above prior highs. Above yesterday morning’s high, which was reversed upon testing “higher prior lows.” Above those higher prior lows. And above last Wednesday morning’s first consolidation of the open’s plunge.

This is an anchor. It doesn’t prevent reversing down, but does help to ensure a reversal’s complete eventual recovery. Another dip under 2258.50 would likely trigger that attempt to reverse down. Otherwise, a probe above 2273.00 is the ultimate objective.