Post-open Review

Increasingly larger pre-open legs overshadowed by post-open plunge.

The last overnight upleg had retraced the prior 9-point rally, and extended 5 points higher to attack 2144.00. The 2142.00 open slid sharply back down to 2135.00. And that was just the opening 15 minutes of volatility.

Not immediately, but soon the drop had resumed and extended down to 2126.75, 17 points under the pre-open high. All well within the first hour.

The 2143.00 bias-up target was tested pre-open, by (barely) more than 15 minutes, so we can’t assume its test was rejected. Otherwise, having also rejected a test of the 2138.00 bias-up signal, offsetting tests of BOTH bias-down parameters would be in-play, including the 2122.50 bias-down target. Instead no-bias triggered. The 2129.75 bias-down signal’s test is already fulfilled.

In fact, the bias-down signal was probed after 10:15. Maintaining its break through 10:30 would have invalidated the no-bias signal. But it was overlapped in time to maintain the no-bias signal. Probing under it would be “no-bias trending” that requires recovery.

Until the no-bias environment begins lapsing, a bounce to 2132.50 and 2135.75 is possible. But not required. Back under 2127.75 first would target 2124.50 and possibly the 2122.50 bias-down target. Regardless of an interim bounce, delaying a break lower for long enough would be free to trend down even deeper.

Gap down ultimately holds, eventually reacts.

Opening at the 2127.75 bias-down target and testing the 2126.25 overnight low was recovered up to 2130.50 on news. Its reaction down to a fresh low was recovered enough to hold 2127.75, and to avoid renewing the bias-down signal.

Not renewing the bias-down signal is the only bullish element of this morning’s open. And that’s not a very bullish element.

Ranging narrowed around 2127.75 into 10:30. Surging AFTER that has tested the 2133.50 bias-down signal by 1 point. It’s too late to trigger, to invoke the grace period, or even to invalidate the bias-down. When tested, the bias-down signal should define the range’s upper-end until the bias environment is at least within 10-15 minutes of lapsing at 11:30.

Currently, the 2133.50 test is holding. Probing above it could suffer the additional consequence retesting the 2129.00 10:15 print. The decline can resume anytime and be credible. A credible recovery should wait until coming within view of the bias environment lapsing.

Pre-open drop fails to hold its probe under prior lows.

Sellers threw a lot of stuff at the open. They haven’t been rejected, but they failed to complete a bearish setup.

Testing the rally’s 2150.00 objective overnight had reacted down to 2144.00 and 2142.25. The open only deteriorated further by extending down to probe 2 ticks under yesterday’s 2140.50 low.

That also included a test of yesterday’s 2143.25 bias environment low. Having trended up into yesterday’s cash session close, maintaining an open under 2143.25 could form a “session-long decline.” Also breaking under yesterday’s session low would be extra confirmation.

This was all the open’s sellers could bring. Probing under both prior lows was recovered at 9:45 back up to 2144.00, and then up to 2145.75. No-bias was triggered, having avoided a break under the 2141.25 bias-down signal. Having actually tested the bias-down signal before not triggering it, an offsetting test of the 2148.00 bias-up signal is in-play.

That didn’t prevent a drop back to within 1 tick of 2141.25, just before 10:30. Any lower any later would have invalidated the no-bias signal. That was avoided, and back above 2143.75 should launch the next recovery leg. But be careful under 2141.25 (being tested now) in case a deeper detour is underway.

Gap up maintains high enough and long enough.

The 2145.75 opening print surged to 2147.00 and eventually extended to 2149.00. That didn’t prevent reacting down to test and retest 2144.25. But the 2140.75 bias-up target was exceeded at 10:15 to renew the bias-up signal.

Its renewed bias-up target at 2145.50 was still being tested. That’s actually not so relevant, and just touching 2145.50 has made 2150.00 likely to be tested, too.

Regardless of whether attacking it to within 1 tick is sufficient, the overnight rally is now pretty extended. Meanwhile, the open’s gap up above prior highs was maintained and extended high enough and for long enough to create an anchor that helps to recover from a dip. And a dip back down to last weeks’ “lower prior highs” centered around 2142.25 would help to neutralize its attraction below.

In fact, 2142.25 was just attacked to within 2 ticks. Back above 2146.50 would start to signal the open’s anchor is attracting price back up. Otherwise, lower prior highs could include a test of 2140.75.

Extended dip stops short of next target.

Gapping down to test yesterday’s 2126.50 low was likely to react up through the morning. Relentlessly expending selling pressure overnight, and opening at structural support, wasn’t likely to produce or attract more sponsorship to its trend. On expiration, that could have gone either way — but not ranged flat.

That opportunity disappeared when pre-open action slid sharply to 2123.50. The next opportunity for reversing up would come from testing the next structural support at 2121.25. But the post-open bounce to 2127.00 was only retraced to retest its origin — calculable support at the 2124.00 bias-down target.

2124.00 held its retest. And held. And held and held. Four attempts to break lower failed. Even the most bearish scenario was beginning to require a bounce to stretch the rubber band first.

That bounce is getting to be a stretch, alright. It tested the 2130.50 bias-down signal by 1 point. It’s still being overlapped, and not rejected. Enough time was spent maintaining the gap down to create an anchor, and to expect the bounce to fail. But not reversing down from here — triggered under 2128.00 — could fill the gap back up to yesterday’s 2137.00 close.