Post-open Review

Yesterday’s range is sticking.

I voiced one concern before the open for today’s session: that the pre-open volatility was deceptive, still being contained within yesterday afternoon’s range. On Fridays, not already trending through the open, or at least during the morning, can be very difficult to trend again before the weekend.

The open hinted at some new volatility, separate from the pre-open Employment Situation reaction. A 10-point pullback through the open down to 2699.00 reacted up to eventually trigger late bias-up. Probing fresh highs up to 2716.00 between 10:15-10:30 adds reliability to a late signal. But price action since then has developed mostly back under yesterday’s 2709.00 high.

While buyers haven’t exploited the bias-up, sellers haven’t retaken control. Exiting the morning’s bias environment at or above the morning’s 2711.00 bias-up signal helps to maintain its influence. And now this afternoon has triggered noN-bias by still testing its 2705.00 bias-down signal, and not triggering it. Sponsorship isn’t making itself apparent, which can be even more limiting on Fridays.

Be careful if trading anyway, trending attempts could still develop. But fading trading attempts and limiting the exposure to several points and/or several minutes continues to be preferable.

Recovered dips suggesting higher rewards.

Optimism had been wrung from the market by fresh overnight lows down to 2696.25 ahead of the Employment Situation report. That better enabled a knee-jerk reaction up to 2709.25. All of which was still within the overnight range.

The reaction’s optimistic surge was also wrung out by dipping into and out of the open down through the first half-hour to 2699.00. Its reaction surged up to the 2711.00 bias-up signal in time to invoke the grace period.

Extending higher into 10:30 touched 2716.00, which easily triggered late bias-up. Extending higher post-10:15 also often improves the reliability of a late signal. It doesn’t prevent reacting down, such as now dipping back down to the 2711.00 bias-up signal.

The 2719.50 bias-up target is in-play. The lateness in finally breaking out has left behind a lot of congestion that will try attracting price back down, unless Friday Factors enable the morning’s trend to drift higher.

Early sellers were also late. Early buyers are already rewarded.

The open was greeted by two setups. A bearish Globex-flip was opening back under the earlier Globex low after having probed above yesterday’s high. And a Too-late Globex breakout had just begun probing under the earlier overnight range. Triggering or rejecting either would be likely to be very productive very quickly.

The Globex-flip maintained its open under the 2681.75 earlier Globex low, but never extended under yesterday’s 2674.25 last relative low to confirm. The Too-late Globex breakout was retraced back to the earlier range, but wasn’t resuming its earlier breakout. The setups eventual rejections reversed back up sharply to probe the 2695.00 bias-up target by more than 2 points.

The reversal’s pullback limit was violated, and the rally tried resuming before bothering to form any complexity or accumulative behavior. That recovery is often unreliable, and it has reacted down 6 points to 2692.00. There’s room down to 2689.50 or 2688.00 before suggesting an even bigger dip underway.

Back above 2697.00 (being tested now) would start to signal the rally has resumed. A second consecutive higher close today would confirm 2701.00 is in-play — which could be tested while confirming, which would then suggest 2756.00 is also in-play. No second consecutive higher close, especially if 2701.00 were visited in the interim, could already reverse momentum down.

Gapping up into untested territory finds natural resistance.

The overnight 2636.00-2648.00 range resolved up sharply to test 2655.00. Reacting down to 2649.00 had recovered entirely by the open, which then improved only momentarily to attack 2657.00. But the open only fluctuated around 2656.00.

A 10-point drop tested the 2647.00 bias-up signal, which held. So did a retest, triggering bias-up. Its 2653.00 bias-up target was met already, and it’s being tested again now up to 2655.00.

This is still a bias-up environment, so higher highs are likely. But it is difficult to attract sponsorship for trending ahead of the afternoon’s FOMC events. Meanwhile, the bias-up environment can retest its bias-up signal as support, which would become more vulnerable to breaking lower as the bias window lapses.

Pre-open recovery finds NQ sympathy.

Not even minutes after sending out this morning’s pre-open Market Tour, a couple of earnings warnings and misses hit the tape. But not the market, which ticked higher, retesting yesterday’s 2642.75 cash session close. Higher highs were likely, and eventually touched 2647.50.

Pulling back to 2640.00 through the open was recovered into a congestion at even higher highs up to 2650.00. That didn’t prevent an even deeper drop to 2638.25. The 2645.00 bias-up signal held its test to trigger no-bias.

And then it didn’t. Although too late to trigger, a surge through 10:30 recovered 2645.00 in time to invalidate the bias signal. Neither bias signal is required to contain price action, the bias-up target isn’t in-play, and an offsetting test of the bias-down signal isn’t required.

But an offsetting test of the 2633.00 bias-down signal is now being probed down to 2629.50. That’s attacking the overnight low, which was a 61.8% retracement of yesterday’s intraday range. The turnabout is probably in sympathy with NQ’s which have plunged under yesterday’s lows.

ES rejected two post-open dips which normally suggests they be rewarded by another fresh high. That’s not required, but neither sponsorship is entirely credible this morning for maintaining control. Exiting the bias environment in rally mode would be bullish for a bigger bounce, but sellers get a benefit of the doubt otherwise.