Post-open Review

Opening bounce meets post-open plunge.

Opening at 2168.00 never dipped any deeper before soon resolving up sharply. But the 2180.50 overnight high — essentially the rally’s next higher objective — was only attacked to test resistance at 2178.00 before reversing back down.

And down. And down.

The 2171.00 bias-up target was retraced aggressively, on the way down to touch the 2164.25 bias-up signal in time to invoke the grace period. The 2154.25 bias-down signal was attacked to within 3 ticks at 10:30, just when its offsetting test was being triggered by a late no-bias signal.

But this morning’s no-bias wouldn’t be completely satisfied by the offsetting test of signals. Having tested the bias-up target, an offsetting test of the bias-down target was required, too. So the drop extended down to probe the 2148.75 bias down target by 1 point.

Bouncing back up to 2160.00 was retraced entirely. Its reaction down and a couple of shallower bounces have formed a Descending Triangle pattern. Attempts to reject it back above 2156.00 and 2160.00 are ongoing — the bias environment began lapsing at 2156.00, and now the noon hour entry is testing 2160.00.

Entering the noon hour above 2160.00 would be credible for launching a retest of overnight highs. The morning’s drop was dramatic and substantial, but not otherwise relevant since yesterday afternoon’s bias environment low has not been broken. Not resuming the rally today wouldn’t necessarily be bearish — not so long as fresh lows are avoided.

What overnight crash?

Opening at 2118.25 surged within 3 minutes to test our first objective at the 2134.50 “higher prior lows.” Reacting down came within 1 tick of its 2121.25 target before bouncing again. The 2140.75 bias-up signal’s test sent price back down again, this time to within 1 tick of the 2125.25 bias-down target.

Along the way down, the 2130.50 bias-down target was overlapped for long enough to invoke the grace period. After dipping to within 1 tick of the bias-down target, a bounce retested the bias-down signal at 10:30. This triggered a noN-bias.

noN-bias. Not bias-down, whose target was met to within 1 tick, anyway. Not no-bias, whose offsetting bias signal was already tested, anyway. But noN-bias.

Now the bias environment is lapsing. The higher prior lows are being probed to the next objective, retesting the 2152.50 overnight high up to 2153.75. Knowing the overnight low requires a retest — “new Globex trend extreme,” limit down — this seems like nothing more than a post-Brexit buying blindly strategy. That doesn’t sound rash, at all…

1-minute and 3-minute RSIs are simultaneously overbought into the highs. Reacting down would be required to recover. Meanwhile, the overnight high’s retest could attack 2160.00.

Fresh pullback low holds yesterday’s range.

The 2122.50 immediately extended down to touch yesterday’s late 2119.25 low. Its reaction up to 2124.25 was retraced entirely. The next reaction up has extended to attack yesterday’s cash session close at 2126.50.

But meanwhile the 2123.50 bias-down signal triggered at 10:15. It triggered cleanly. Bouncing to touch it at 10:30 did not actually recover it, so it is not invalidated. One more opportunity to invalidate it would recover the 2132.50 bias-up signal at 11:30. But that’s unlikely since yesterday afternoon’s buyers didn’t gain traction, which wasn’t invalidated by the open gapping up.

None of which prevents filling the gap back up to yesterday’s 2129.00 futures close. Or actually testing the 2132.50 bias-up signal. Otherwise, exiting the bias environment at 11:30 back under 2122.75 and 2121.25 would trigger a drop to fresh session lows. The 2118.25 bias-down target’s test would likely be probed down to 2113.50.

Gap up maintained, extended.

The open’s immediate bobble held a quick test of the 2108.75 pullback limit before extending back up to and through the 2111.00-2112.00 overnight highs. Sellers are likely marginalized for at least the morning.

A running correction / rising wedge formed up to 2114.00. The pattern was entered and exited aggressively, then forming a potential plateau. Dipping back down into the wedge to 2112.00 could refuel the rally, but any lower could reverse the uptrend.

Avoiding any pullback from the plateau, and instead extending higher, could marginalize sellers for another 1-2 uplegs. That would easily get to and through 2120.00-2121.00, if not also to 2134.00 and 2138.00.

The plateau is actually resolving up now. The next opportunity for correcting down temporarily is likely from 2120.00-2121.00.

Wide swings all centered around unchanged.

Greeting the Employment Situation report at unchanged around 2084.00 eventually surged to test 2088.00. Its reaction down attacked 2080.00 through the open. Another surge attacked 2088.00, reversing down again  to 2079.00. All centered around 2084.00, repeatedly attracted back to and through it.

This market does not want to sit still. But it also seems incapable of rallying, having held two tests of yesterday’s last relative high. Rallying is not to be confused with probing prior highs. For example, holding a test of this morning’s 2082.00 bias-down signal puts into play an offsetting test of the 2088.75 bias-up signal. Probing it could also test 2090.00-2091.00. But that wouldn’t be a rally. and it would remain likely to resolve down.

A couple of observations. First, Post-open lows stopped optimistically short of each other, if not probing lower with only errant ticks. Their bounces all failed, making that “ineffectual optimism.” Not a durable bottom. Second, at least three of the first hour’s five 15-minute checkpoints all overlapped 2084.00 / unchanged. This tends to be difficult to trend away from, although not without aggressive attempts.

Back under 2082.00 at 10:30 would invalidate the no-bias which triggered at 10:15. Fresh lows at 2077.50 remain likely, despite the fresh low already having neutralized the attraction to yesterday’s oversold RSIs. Meeting the target this morning would have still allowed time for countertrend sponsorship to absorb the drop, and for 2084.00 / unchanged to attract price back up for a possible bottom. Instead, the attraction to fresh lows remains outstanding, and testing it this weekend could open the dam to a flood of selling into the weekend.

With apologies to Buckminster Fuller, to stand still is to fall.So it is with bouncing shallowly and permaturely.