Post-open Review

Overnight rally accelerates into the open. Then stops.

This morning’s 2165.50 bias-up target had been tested and retested before the open. It was probed up to 2167.50 at the open. The session’s first 7 minutes surged to within 3 ticks of the 2172.50 renewed bias-up target.

Of course, bias-up had yet to trigger, let alone be renewed. After forming a pattern that was not distributive, and unlikely to be a top, a reaction down ultimately reached its limit at 2167.50. Its reaction recovered to actually touch 2172.50.

The renewed bias-up target was met. Only 1 -minute RSI was overbought. Price was responsive, and the pullback limit was soon violated. Bow a sell signal under 2169.50 has triggered. Noise alone could gravitate back down to its 2165.50 bias-up target. Selling pressure could attack the 2160.00 bias-up signal.

Exiting the bias environment at 11:30 above its 2170.00-2172.50 renewed bias-up target would not be a signal of its own. But it happens to coincide with two-week old “higher prior lows” that shouldn’t be exceeded unless the rally were extending substantially higher.

Otherwise, reversing back under the 2167.00 open would suggest a high is forming. The balance of the session would be vulnerable to reversing down sharply.

Opening surge hangs on.

The open surged through yesterday afternoon’s 2138.75 bounce high on the way to 2142.50. A pullback to 2139.75 held as expected, and resolved up to 2144.25.

Although the actual path here was a little different., that’s not a new level, not for this week. Monday and Tuesday both gapped up to this area. Monday exceeded it to attack 2147.00, and Tuesday only attacked 2144.00. Both resolved down sharply.

Resolving differently today is not ensured. But it’s likely. And the more hesitation now to extending higher, the likelier that is ineffectual pessimism, which is potentially bullish from a contrarian perspective.

Impending news like this afternoon’s FOMC events create anxiousness that could trigger selling. And already extending higher does create more room to expend selling pressure without it impacting the upside. Back under 2140.25 could extend back under yesterday afternoon’s high again to 2133.00, and still be likely to recover.

Otherwise, even the most bullish scenario need not resolve up immediately. But ranging flat-to-higher this morning — perhaps up to 2146.00-2147.00 — is likelier than reversing down.

Post-open efforts absorbed by another downdraft.

The overnight recovery to 2142.00 had held up into the open, giving little excuse to delay retesting yesterday morning’s high around 2147.00. There being room to 2137.50 before suggesting that momentum is reversing down, a post-open dip under 2139.00 would be a compelling long-entry.  In fact, a post-open dip touched 2137.50, and recovered to a fresh high at 2143.50.

But that STILL couldn’t trigger the 2140.50 bias-up signal. Although 2140.50 was attacked to within 1 tick at both times, no-bias was triggered at 10:15, and wasn’t recovered at 10:30. An offsetting test of the 2128.25 bias-down signal is in-play.

Having said that, any credible reversal down should have been obvious early. It wasn’t. Instead, the overnight high was probed immediately, and a reaction down was recovered to fresh highs. Only then did price drop. Dropping to 2134.50 was still in positive territory, and its bounce limit was just violated.

After barely triggering no-bias.

So, buy signals will be considered, regardless of the unfinished business below at 2128.25. Back above 2139.25 would put into play fresh session highs, and a retest of yesterday’s highs, and higher. Meanwhile, back under 2135.25 would still target 2128.25.

Gap up eventually extends through overnight highs.

Pre-open action had pulled back to 2138.50, apparently eking out a last bit of selling pressure. Post-open action quickly firmed back up to test the 2141.50 bias-up target.

Not quickly resolving down aggressively was already unlikely to extend down later. Just as importantly, not quickly rallying aggressively was likely to have reserved its buying pressure, so that last Thursday’s 2144.50 high could be exceeded.

And 2144.50 was exceeded. A 5-point surge started after exiting the first 15 minutes of volatility, momentarily touching 2146.75. Retesting 2144.50 essentially fulfills the renewed bias-up target. But retesting 2144.50 so slowly also makes the next higher objective likely, too.

That next higher objective begins at last Thursday’s 2149.00 “lower prior highs” up to 2150.50 and slightly higher. Avoid violating a pullback — currently testing one at 2145.00 — and the rally is likely to persist through the morning. Back under 2141.25 would signal momentum reversing down.

Overnight drop extended through the open.

Testing the 2127.00 bias-down target overnight had produced a bounce that recovered the last downleg from 2136.00. Its test and retest greeted the open at 2131.00, on the way down to retest 2127.00. Breaking under 2127.00 through 10:15 has renewed the bias-down signal, next targeting 2121.25.

Meanwhile, the open gapped down under 2134.00 to help reject yesterday’s close above it. Closing under 2134.00 would help confirm this remains a distributive environment, likely to resolve bearishly.

Extending down to 2123.25 while 1-minute RSI diverged positively is producing a bounce. It’s now testing 2132.50, and could still test 2134.00. But back under 2128.50 would signal the drop had resumed.

This being expiration — quadruple witch, no less — sudden reversals are more possible, if not likelier. Exiting the bias environment back above its 2132.75 bias-down signal (being attacked now to within 1 tick) would suggest a bottom for the day is in. The afternoon otherwise remains likely to trend down.