Post-open Review

Gap down eventually slides.

The open gapped down to the 2171.50 bias-down signal. Fluctuating around it through the first 45 minutes invoked the grace period, just as that window was opening. Price was already sliding by 10:15. A negative knee-jerk reaction to EIA dug the knife deeper to help trigger late bias-down.

That reaction plunged to touch the 2166.00 bias-down signal. So far, it’s holding. Not reacting, but holding.

Oversold RSIs at the low would undermine a recovery attempt until retested. Back above 2170.00 would start to signal momentum reversing up, anyway, at least temporarily. But the likelier scenario is that the corrective bounce from Friday’s low has given way to a new downleg, targeting fresh lows.

Delayed resumption of yesterday’s late reaction down.

The third consecutive narrow overnight range once again broke sharply at the open. But this time, not until the open. And the opening break was reversed. Actually, today’s opening break up to 2181.50 was retraced back to the 2178.00 open, which held through the half-hour.

Finally breaking lower still had not touched the 2174.25 bias-down signal until the very end of the 3-minute window either way around 10:15. Having invoked the grace period, 2174.25 was still being touched at 10:30 to trigger noN-bias.

So, the bias-down target is not in-play, and neither is an offsetting test of the bias-up signal. The 2179.75-2171.50 objective of yesterday’s late-reaction down from 2182.00 has been pierced.

Since the break is not “no-bias trending” that would require a recovery, this morning’s dip can become something more substantial. With tomorrow being peak liquidity ahead of a three-day holiday weekend, any near-term trending must be underway before then — which makes a break under Friday’s lows possible today or tomorrow.

Bias-up signal held, held on to.

Deceptively calm overnight narrow ranging spiked up from the 2169.75 open. Just recovering 2170.75-2171.50 through the opening 15 minutes of volatility had made the 2177.75 bias-up signal’s test likely. Surging through the opening 15 minutes of volatility had already come within 3 ticks of 2177.75.

Testing and retesting 2177.75 didn’t break it. But neither was it rejected, still being overlapped when the grace period lapsed at 10:30. Holding its test would have put into play an offsetting test of the 2163.50 bias-down signal, and triggering bias-up would have targeted 2183.00.

The pullback limit is being violated, and back under 2175.00 would target 2166.00. There is otherwise no bias requirement this morning.

Pre-Yellen optimism vs. post-Yellen optimism.

The relatively narrow overnight range had tried breaking lower pre-open. Its pre-open recovery became a post-open surge, from 2174.25 up to 2180.75.

Rather than patiently hunkering down ahead of Yellen’s remarks, the market decided to greet them with a stiff upper-lip. Clearly, the open had become a battle between optimism and pessimism. And Yellen’s remarks clobbered optimism right in its stiff upper-lip.

Already ahead of her comments and triggering a sell signal under 2178.00, price plunged in reaction down to the setup’s 2170.75 target.

Excessive optimism, meet excessive pessimism.

Even more impressive was its immediate reaction back up to a fresh high at 2181.50. Another reaction down held the 2177.00 bias-up signal as support, gravitated around a 2178.75 sell signal (which had been unfinished business from yesterday, and surged again to attack 2187.00.

That’s the renewed bias-up target. It’s not officially in-play, since the 2182.00 bias-up target was still being overlapped at 10:15. But exceeding 2187.00 through 10:30 would suggest a bigger squeeze into the noon hour.

Meanwhile, back under 2180.50-2181.25 would open the door to fresh session lows, if not also for the week.

SPECIAL NOTE: I will be away from the screens on the afternoons of both Thursday and Friday, this week and next, Thank you for allowing me to be of personal assistance in a family matter.

Pre-open attacks on yesterday’s 2168.75 low had stopped optimistically short of touching it, suggesting it would at least be probed. Even that would not assure sustaining a break lower. So, the actual inflection point was calculated to be 1 point lower at 2167.75.

2167.75 was touched, but it did not break. Its touch inflected back up sharply to test the 2171.50 bias-down signal as resistance. It was recovered through 10:15 to trigger no-bias.

Actually, a very late blip-down touched 2171.50 within the 3-minute window around 10:15. The grace period held it, but it hasn’t yet been rewarded. Back under 2170.75 would undermine the no-bias signal. Otherwise, an offsetting test of the 2168.75 bias-up signal is in-play.