Post-open Review

Post-open probe under overnight lows.

Opening within the choppy pre-open range at 2118.00 did not both trying to reject the overnight slide. Neither did the open rush to resume the slide. And those were the two templates that could have formed a near-term bottom.

Price action instead gradually returned to the pre-open range’s 2115.00 lower-end, and then sharply through it to test 2108.00.. Slightly higher oversold RSIs there led to a bounce testing 2117.00. Its reaction down is probing back under the overnight range’s 2115.00 lower-end.

Probing under 2112.00 and quickly recovering back above 2115.00 would have launched a morning rally. Probing under 2112.00 and recovering back above 2121.00 into the noon hour could produce an afternoon bounce.

Otherwise, Tuesday’s slide has resumed, and the overnight slide will resume, next targeting 2105.00 and 2095.00.

No-bias follows tests of both bias signals.

The 2135.00 bias-up signal wasn’t touched within 3 minutes of the 10:15 bias timing window. But it was touched before then. So, an offsetting test of the 2126.50 bias-down signal is in-play. Or, would be in-play, if not tested already during the open. For the same reason, holding the bias-down signal’s test doesn’t put into play an offsetting test of the bias-up signal, because it has been tested already.

Exceeding either signal through 10:30 would have been too late to trigger or to invoke the grace period. But it would have invalidated whatever was triggered at 10:15.

In fact, 2135.00 was probed by 2 points. But still overlapping it at 10:30 prevented invalidating the no-bias. That doesn’t preclude extending higher to test the 2140.75 bias-up target anyway, especially during today’s low-volume environment. But it’s still the least likely resolution. And back under 2132.25 would reverse momentum down.

Backing-and-filling hardly defines this morning’s action.

Not indicating a gap up this morning had left only one path up, and it had to be exploited immediately at the open. But for the first minute blipping-up to attack the 2154.25 bias-down signal, there was no immediate buying pressure.

Not much delayed buying pressure, either.

So, the direction has been down. That’s not surprising, since the open didn’t meet its bullish parameters. But it’s surprising anyway. Very surprising. The downside action was likely to be only backing-and-filling. A few air pockets uncovered, but quickly recovered.

This morning has been more like dropping a rock from the top of a cliff. The 2149.75 bias-down target and the 2143.50 renewed bias-down target were exceeded through 10:15 as the bias timing window was triggering. Now the bias environment is within view of lapsing, and 2133.25 has been touched.

RSIs are oversold at the low, suggesting that a bounce from here would fail, too. There is no requirement to recover, anyway. And there’s no bullish reason to be revisiting recent lows — let alone to be probing under them.

Perhaps most bearish of all is that there is no specific reason for the slide. So, there is no scapegoat to value and to assume has been discounted. That’s the “uncertainty” we always hear how much the market hates.

Meanwhile, the bias-down environment is ending. Its oversold RSIs won’t allow a durable recovery. And the series of lower lows and lower highs is a downtrend, which doesn’t suddenly reverse up substantially. Any bounces remain likely to be only temporary. And not recovering out of the noon hour could instead see the afternoon double this morning’s drop.

Gap up above prior highs maintained through open.

Gapping up to 2158.00 was at or above each of last week’s intraday highs. Post-open action hardly looked back while extending to 2163.50. That’s even above Friday’s pre-open reaction to the Employment Situation report.

Maintaining a gap up above prior highs is an anchor. It’s not assured of extending higher this morning but often does. Reacting down would be very likely to recover entirely.

Potential for reacting down comes from having extended so far already. Not arbitrarily, but holding a test of the 2162.25 renewed bias-up signal. Exceeding it through 10:15 would have doubly-renewed the bias-up, and still have been vulnerable to a pullback.

Overbought RSIs at the high require its retest, even after a 2-point dip was recovered to within 1 tick. Regardless, back under 2160.75 would suggest a deeper pullback underway this morning. Exiting the bias environment at 11:30 under the 2156.50 bias-up target is the minimum requirement to suggest the day’s momentum is reversing down.

Still too little optimism to expect a new downleg.

The gap back up to last Friday’s 2160.00 area close remains unfilled. Probing it pre-open does not qualify. More so, its pre-open probe was in reaction to a headline. The gap up testing 2159.00 still represented restrained optimism. So, reacting down — no matter how substantially — can still be recovered.

This morning’s reaction down was 13 points, attacking the 2145.75 bias-down target to within 2 ticks. The 2151.25 bias-down signal triggered late, and was barely confirmed at 10:30. Actually fulfilling the target would be likelier to hold than to break lower, which would target 2140.75.

Rallying this morning back above 2151.25 would be difficult, being a Friday when the morning bias tends to persist through the noon hour. Regardless of how and when it might begin, the bias-down target could be ignored, and the afternoon could simply gravitate higher.